Baltic Journal of Economic Studies 283 Vol. 11 No. 4, 2025 DOI: https://doi.org/10.30525/2256-0742/2025-11-4-283-293 ECONOMIC AND LEGAL COOPERATION OF EU MEMBER STATES IN THE FIELD OF DEVELOPMENT OF MODERN UKRAINIAN CONSTITUTIONALISM AND MUNICIPALISM Oleksandr Batanov1, Ruslana Maksakova2, Ruslan Веdriy3 Abstract. Ukraine's European integration has gained unprecedented intensity after 2014 and especially in the context of a full-scale war, when the process of gaining EU membership is combined with large-scale constitutional and municipal reforms. Economic and legal cooperation with EU member states is not only a tool of financial and technical support, but also a factor in the transformation of the Ukrainian legal system, its approximation to European standards of democracy, the rule of law and multi-level governance. Strengthening municipalism and modernization of the constitutional principles of public administration are key prerequisites for sustainable development and effective recovery of Ukraine. The relevance of the study is due to the need for scientific understanding of the mechanisms for integrating economic and legal cooperation into the system of constitutional construction and local self-government, as well as developing recommendations for the effective implementation of European practices in Ukrainian conditions. The purpose of the study is to analyze the features and directions of economic and legal cooperation of the EU member states in the field of development of modern Ukrainian constitutionalism and municipalism, to determine the impact of European practices and norms on the transformation of the constitutional system of Ukraine and the improvement of local self-government, and to outline the prospects for further integration of Ukraine into the legal and economic field of the EU to ensure the sustainable development of democratic institutions and regional development. The research methodology consists of such methods as the comparative method, the case analysis method, the empirical method, the historical and legal method, and the systemic method. As a result of the study, an analysis of economic and legal cooperation of the EU member states in the field of development of modern Ukrainian constitutionalism and municipalism was conducted. Based on official EU regulatory acts, in particular Regulation (EU) 2024/792 on the Ukraine Facility, as well as international agreements on partnership, cooperation and association with the EU ratified by Ukraine, key legal instruments of integration are considered. Special attention is paid to the role of the EU in supporting local government reforms and regional development, the implementation of the principles of multi-level governance and financial decentralization. It is established that economic and legal cooperation between Ukraine and the EU is a mutually reinforcing factor both for the constitutional development of the state and for the integration of European standards of municipalism into the Ukrainian legal system. The study confirms that in war conditions, Ukraine's European integration course acquires an additional dimension, combining the tasks of legal adaptation with the restoration of economic capacity and increasing institutional stability. The studied scientific publications and analytical reports emphasize the need for a comprehensive approach, which includes the harmonization of legislation, the implementation of European norms in the field of public administration and the use of EU financial and technical assistance instruments. The generalization of the results obtained allows us to conclude that the effective economic and legal partnership of Ukraine with the EU member states is both an integration tool and an important condition for the sustainable development of modern Ukrainian constitutionalism and This is an Open Access article, distributed under the terms of the Creative Commons Attribution CC BY 4.0 1 V.M. Koretsky Institute of State and Law of the National Academy of Sciences of Ukraine, Ukraine (corresponding author) E-mail: batanov_olexandr@ukr.net ORCID: https://orcid.org/0000-0002-0239-4539 2 National University Zaporizhzhia Polytechnic, Ukraine E-mail: maksakovaruslana@gmail.com ORCID: https://orcid.org/0000-0002-1755-1234 3 Ivan Franko National University of Lviv, Ukraine E-mail: ruslanbedriy@ukr.net ORCID: https://orcid.org/0000-0001-8967-5407 Baltic Journal of Economic Studies 284 Vol. 11 No. 4, 2025 municipalism, contributing to the strengthening of democratic institutions, transparency of governance, and increasing the well-being of communities. Keywords: European Union, European integration, constitutionalism municipalism, economic and legal cooperation, local government reforms, Ukrainian constitutional identity, Ukraine Facility, association with the EU, regional development. JEL Classification: F02, R58, H11 1. Introduction The current stage of Ukraine's development is inextricably linked to the processes of European integration, which involve both political and economic rapprochement with the European Union, as well as deep constitutional and municipal transformations. The support of the EU and the Council of Europe plays a key role in facilitating systemic reforms that ensure not only the implementation of European standards in national legislation, but also form the basis for the sustainable development of local self-government (Council of Europe Office in Ukraine, 2025). The constitutional dimension of Ukraine's post-war reconstruction is particularly relevant, as reflected in the materials of the II Mariupol Constitutional Forum, which emphasizes the importance of taking into account European principles in the processes of regional development and strengthening local democracy (II Mariupol Constitutional Forum, 2023). An important aspect in this process is the formation of a Ukrainian constitutional identity, which combines historical traditions of statehood with modern European values of democracy, the rule of law and the protection of human rights. As the Constitutional Court of Ukraine emphasizes (2024), the Ukrainian constitutional identity not only preserves national specificity, but also integrates into the European legal space, contributing to the strengthening of the legal system and the development of local self- government. In this context, economic and legal cooperation of the EU member states becomes the foundation for the modernization of Ukrainian constitutionalism and municipalism, creating the prerequisites for integration into a common European legal and economic space. The object of the study is the economic and legal mechanisms of cooperation between Ukraine and the member states of the European Union in the field of development of national constitutionalism and municipalism. The subject of the study is legal and economic instruments and forms of cooperation that contribute to the reform and harmonization of Ukrainian constitutional and municipal law in accordance with European standards. The following tasks were set within the framework of the study: 1) to analyze the current state of economic and legal cooperation between Ukraine and the EU countries in the field of constitutionalism and municipalism; 2) determine the impact of European norms and standards on the development of Ukrainian constitutional law and local self-government; 3) identify problematic issues and obstacles to the integration of European approaches into the national constitutional system and the system of municipal governance and develop recommendations for the further development of economic and legal cooperation to strengthen Ukrainian constitutionalism and municipalism. The research question that determines the direction of scientific research is the following: how does economic and legal cooperation between the member states of the European Union influence the development of modern Ukrainian constitutionalism and municipalism? The research topic is determined by the difficulties that arise in the process of adapting Ukrainian constitutional law and the system of local self- government to the norms and standards of the European Union. Despite significant progress in reform, there are such problems as insufficient coordination between national and European institutions, fragmentation of legislative initiatives, as well as economic challenges that affect the effectiveness of the implementation of reforms. The lack of holistic and integrated mechanisms of economic and legal cooperation complicates the harmonization of national legislation with the EU legal system, which threatens the stability and sustainable development of municipal self-government in Ukraine. Thus, there is an urgent need for systemic analysis and the implementation of comprehensive approaches that would overcome existing obstacles and ensure an effective course of Ukraine's European integration. 2. Methodology The research methodology involves the use of a comprehensive interdisciplinary approach that combines legal, economic, and socio-political aspects of analysis. The comparative method was used to compare the norms of Ukrainian constitutional and municipal law with the legal systems and constitutional practices of Baltic Journal of Economic Studies 285 Vol. 11 No. 4, 2025 the European Union member states. In particular, the provisions of the Association Agreement between Ukraine and the EU (2014), the Protocol to the Partnership and Cooperation Agreement (2011) and the Ukraine Facility Regulation (EU) 2024/792 were analyzed. The comparison allowed: to determine the degree of harmonization of national legislation with EU law; to identify provisions that require further adaptation, in particular in the field of decentralization and local self-government (Kokaj & Sinani, 2023); to identify differences in approaches to consolidating constitutional identity (Constitutional Court of Ukraine, 2024; Mangiameli, 2013). The case analysis method was used to study specific examples of economic and legal cooperation between Ukraine and the EU. The implementation of the Ukraine Facility (REGULATION (EU) 2024/792, 2024) aimed at financing the recovery and modernization of the Ukrainian economy and the implementation of cross-border cooperation programs provided for by the Association Agreement was considered as a case study (Lačný, 2021). The result of the analysis was the identification of mechanisms through which EU financial support contributes not only to economic recovery, but also to the institutional transformation of municipal governance in Ukraine. To collect and analyze data from open sources, an empirical method was used – statistical reports- researches by Bruegel (Darvas et al., 2024), analytics by the Robert Schuman Foundation (Diachenko et al., 2024). This allowed: to calculate the economic effects of EU assistance programs in the short and medium term, to correlate the dynamics of socio- economic indicators with the pace of legal reforms, and to empirically confirm the connection between constitutional changes and the investment attractiveness of municipalities. The historical and legal method used in the study is aimed at tracing the evolution of the legal regulation of Ukraine's relations with the EU – from the Declaration on State Sovereignty of Ukraine (1990) to modern integration agreements. Analysis of the historical context (Podorozhna, 2015; Homonay, 2021) showed: the regularity of the gradual expansion of cooperation – from partnership to association and preparation for membership; the growth of the role of the rule of law principle as fundamental in the process of constitutionalization of interaction with the EU; the formation of modern Ukrainian constitutional identity as a result of the combination of national and European values. The systemic method allowed us to consider economic and legal cooperation as a complex of interconnected elements: international treaties, domestic legislation, institutional architecture and economic processes. Thanks to this approach, it was revealed how constitutional reforms interact with municipal and economic transformations; it was established that the effectiveness of integration processes depends on the consistency of legal norms, financial instruments and administrative practices (Teremetskyi et al., 2025); a model was formulated in which European integration acts as a systemic factor in the development of municipalism. Thus, the use of a combination of these methods allowed us to obtain a holistic vision of the processes of European integration of Ukraine in the context of constitutional and municipal transformations, providing a combination of theoretical analysis with empirical confirmation and practical examples. 3. Recent Research Findings An acquaintance with scientific works devoted to the issues of the development of modern Ukrainian constitutionalism and municipalism in the context of economic and legal cooperation with the member states of the European Union allows us to identify several conceptual areas of research. Homonay (2021) has conducted a thorough legal analysis of the national system in light of the requirements of EU and NATO membership, emphasizing the need for systematic harmonization of Ukrainian constitutional and administrative law with EU law, strengthening local self-government institutions, and ensuring the rule of law. The author examines in detail the tools of transformation (constitutional amendments, legislative packages, institutional control mechanisms) and emphasizes that without a solid legal foundation, European integration risks remaining formal. The work has a high regulatory and legal density and is useful for understanding the legal tasks of integration. However, Homonay pays less attention to practical barriers to implementation (corruption, weak executive capacity). In the context of economic and legal cooperation, it is important to add that regulatory harmonization requires not only the adoption of laws, but also financial and technical support from EU partners to implement reforms at the local level. We agree with the author's opinion on the need to harmonize constitutional and legal norms; the role of local self-government as a key level of implementation of European standards, at the same time we believe that greater attention is needed to implementation resources and mechanisms of external support (financial, expert, etc.). Alesina (2023) analyzes the nature of external reform design (tools, standards, technical assistance) and emphasizes that the success of transformations depends on domestic political will and the ability to adapt "European" recipes to the national context. The author calls for inclusive procedures, strengthening the capacity of local authorities, and coordinating donor Baltic Journal of Economic Studies 286 Vol. 11 No. 4, 2025 assistance. In our opinion, Alesina rightly emphasizes the risks of "copying" norms without local adaptation. However, some of his statements are technocratic in nature and underestimate political opposition and social reserve structures. Darvas et al. (Bruegel, 2024) provide a comprehensive economic assessment of integration scenarios, including macroeconomic consequences, trade flow transformations, fiscal expenditures, and institutional requirements. The authors emphasize that the success of integration will depend on consistent fiscal reforms, governance transparency, and improved administrative capacity, including at the local level (Darvas et al., 2024). The researchers’ analysis has a strong focus on economic indicators and risks, which provides a realistic basis for planning financial assistance and institutional transformations. Lačný (2021) focuses on the practical effects of the Association Agreement as stimulating cross-border initiatives, municipal partnerships, the development of local infrastructure and institutional links between local governments. The author shows how the legal provisions of the agreement specifically promote municipal cooperation. In our opinion, this approach is important for understanding the "lower" level of European integration – where transformations take place in practice. The scholar emphasizes the importance of network cooperation and local projects, which are often catalysts for change. We fully support this thesis, as it confirms the relationship between European integration, the development of local self- government and economic decentralization. Petrov (2023) formulates the concept of "Accession through War": the process of Ukraine’s European integration in wartime requires a rethinking of the usual enlargement procedures – greater flexibility, adapted timeframes, simultaneous mobilization of resources for reconstruction and reforms (Petrov, 2023). The article consolidates the realities of wartime with the issue of integration – an important and bold approach. The author rightly notes that this requires the EU to revise standard approaches to enlargement, including greater flexibility in legal and institutional requirements. We agree that post-war reconstruction and integration should occur synchronously, but at the same time we believe that excessive flexibility can create risks for the quality of democratic institutions. Hnatkovych, Yasinovska, Smolinska and Smolinskyy (2023) focus on the need to modernize the regional development of Ukraine by introducing modern strategic planning tools based on the integration of economic, social and environmental priorities. The authors emphasize the importance of harmonizing Ukraine's regional policy with the European model of "smart specialization", which involves the use of local competitive advantages in combination with the institutional capacity of local governments. In particular, it is emphasized that the effective implementation of such strategies requires synergy between central authorities, regional structures and European partners, which is fully consistent with the goals of EU regional policy. Shevel and Popova (2022) view Ukraine’s accession to the EU as a historically conditioned and politically justified process stemming from the internal democratic transformations initiated after the Revolution of Dignity. They argue that European integration is not only a foreign policy choice, but also a guarantee of the stability of democratic institutions and the rule of law, especially in times of war. In this respect, their position coincides with contemporary studies on security integration, which view EU membership as a tool for increasing a state’s resilience to hybrid threats. Podorozhna (2015) analyzes the methodological principles of constitutionalization of the legal order, distinguishing between general and special legal mechanisms. The author argues that constitutionalization is not only a formal process of consolidating norms, but also a tool for adapting the legal system to changes in society and the international environment. This approach is important for Ukraine, since the process of implementing the acquis communautaire requires the simultaneous preservation of national identity and ensuring compatibility with European standards. Teremetskyi, Bodnar-Petrovska, Yuriiovych and Lien (2025) highlight the main characteristics of the EU legal system: a multi-level governance structure, the dynamism of law-making, the interaction of the supranational and national levels, as well as the tendency to expand the Union's competences. The authors emphasize that such a model requires candidate countries not only to formally align their legislation with the acquis, but also to create institutional capacity for its implementation. Dougan (2000) considers the concept of "minimum harmonization" of the EU internal market, which allows for the unification of basic standards while maintaining space for national specificities. This approach may be useful for Ukraine, as it allows for gradual integration into the common market without losing flexibility in internal legal regulation. Lenaerts, Nuffel and Corthaut (2021) examine the historical evolution from the European Communities to the EU, demonstrating how the expansion of competences and deepening integration gradually transformed the EU into a political and legal community with elements of a constitutional order. They note that the development of EU law has a "cumulative" nature, where each stage of integration lays the foundation for the next, which should be taken into account when planning Ukraine’s integration strategy. Lightfoot and Szent-Iványi (2024) examine in detail the evolution of international development policies Baltic Journal of Economic Studies 287 Vol. 11 No. 4, 2025 in CEE countries after EU accession. At the initial stage, there was a clear convergence with European standards, driven by the implementation of the acquis communautaire and active external support. However, later, as the authors note, divergence began to appear, when governments began to prioritize domestic policy goals rather than integration tasks. This suggests that the EU's influence mechanisms are most effective during the pre-accession adaptation period, but lose intensity after membership is achieved. Folvarčný and Kopeček (2020) examine the ideological profile of the Law and Justice (PiS) party in Poland, noting a combination of national conservatism, Christian democratic principles, and Euroscepticism. This ideological structure leads to a cautious or even oppositional attitude towards certain EU policies, particularly in the area of the rule of law. The authors emphasize that such examples illustrate how national political identity can become a barrier to full harmonization with European norms. Henriksson (2015) analyzes the process of Europeanization of foreign aid policy in Latvia and Slovenia in 1998–2010 and concludes that the decisive factors of adaptation were external incentives of the EU – financial resources, requirements for the acquis, as well as the "policy of conditionality". However, the component of internal identification with European values is also important, which determines the depth and sustainability of reforms. The author also warns that after the countries join the EU, the pace of Europeanization may decrease, as the intense pressure before the next period disappears. Kokaj and Sinani (2023) focus on the concept of multi-level governance, explaining that local authorities in the EU system are not just executors of directives, but become active actors in the formulation and implementation of policies. The effectiveness of this model depends on coordination between institutions at different levels and adequate resource provision to municipalities. Moreover, Mangiameli (2013) examines the phenomenon of identity of member states in the context of the integration process, noting that the EU does not destroy national identity, but integrates it into a broader supranational space, creating a "multi- level identity." For Ukraine, this aspect is especially important, since integration into the EU will not involve unification, but rather a synthesis of national legal culture with European norms. Additionally, Sanden (2022) comprehensively analyses EU development policy, focusing on its transformation under the influence of global challenges such as the Sustainable Development Goals (SDGs) and growing geopolitical competition. The author argues that modern aid policy is increasingly oriented towards a partnership approach, where recipient countries are seen as equal participants in joint projects, rather than just objects of funding. Synthesizing the above approaches, it can be stated that the EU plays the role of a powerful catalyst for political and institutional changes in CEE countries (Henriksson, 2015; Kokaj & Sinani, 2023; Sanden, 2022), however, domestic political factors and national identities remain decisive in the pace and depth of integration (Lightfoot & Szent-Iványi, 2024; Folvarčný & Kopeček, 2020; Mangiameli, 2013). In the context of Ukraine, this means the need to simultaneously ensure harmonization with EU legal norms and preserve its own cultural and legal identity, while strengthening the role of local self-government and forming an effective international development strategy can become key conditions for the success of the European integration course. Ekengren and Jacobsson (2000) analyze the constitutionalization of EU governance using the example of European cooperation in the field of employment, emphasizing that even in policies that traditionally fall within the competence of the Member States, there is a gradual formation of common legal norms and procedures. The authors point to the role of "soft law" as a coordination tool, which over time can become binding, forming the prerequisites for the constitutionalization of certain policies at the Union level. Kotcur (2008) in his work pays attention to regional cooperation of European states, considering it as a combination of intergovernmental and supranational elements. The author notes that the effectiveness of regional cooperation organizations depends on the balance between the sovereignty of states and their willingness to delegate some of their powers to common institutions. In this context, the EU is a unique example of the deepest integration, which goes beyond the classical models of international organizations. Fava (2011) examines the constitutional development of the EU through the prism of the "solidarity integration model", emphasizing that economic unity without social and political solidarity cannot ensure the long-term stability of the Union. The author argues that the Lisbon Treaty has initiated a new phase of integration, where the principles of solidarity and shared responsibility gain importance, in particular in the area of resource allocation and responsibility for common security. What is more, Hartley (1999) focuses on the constitutional problems of the EU, highlighting the tension between supranational bodies and national governments. According to the author, the key problem is the lack of a clear demarcation of competences, which sometimes leads to conflicts of jurisdiction and political crises. Hartley also emphasizes that any further federalization of the EU will require deeper changes to the founding treaties. Baltic Journal of Economic Studies 288 Vol. 11 No. 4, 2025 Bogdandy (2003) examines the constitutional relationship between the EU and the European Community, focusing on its implications for the member states. He argues that the dual structure of the legal system (EC and EU before Lisbon) made it difficult to determine the priority of norms, but at the same time ensured flexibility in the integration process. After the Lisbon Treaty, this duality disappeared, but new questions arose related to the distribution of competences and the scope of the EU's powers. In a more applied vein, Diachenko, Melnyk and Naumenko (2024) examine the negotiation process for Ukraine’s accession to the EU, summarizing the reforms implemented over the past decade. The authors note that significant progress has been made in the areas of decentralization, public administration reform and harmonization of legislation with the acquis communautaire. At the same time, the main challenges remain ensuring the rule of law, fighting corruption and adapting economic policy to the requirements of the EU internal market. The researchers emphasize that the success of Ukrainian integration depends not only on the formal fulfillment of the criteria, but also on the internal sustainability of the reforms in the long term. The synthesis of these studies suggests that the constitutionalization of the EU is a gradual and multidimensional process in which institutional innovations (Ekengren & Jacobsson, 2000; Kotcur, 2008), the concept of solidarity-based integration (Fava, 2011), and the resolution of constitutional competence issues (Hartley, 1999; Bogdandy, 2003) interact with specific national reform processes (Diachenko et al., 2024). For Ukraine, this means that the accession process will require not only technical harmonisation of norms, but also strategic adaptation of the governance model to EU principles and values, including the institutionalisation of solidarity mechanisms and multi-level governance. The analysis of scientific research indicates the complex nature of the European integration process of Ukraine, covering both legal and economic, political and social aspects. In particular, Homonay (2021) focuses on the need for constitutional and legal support for Ukraine's integration into the EU and NATO, emphasizing the importance of adapting national legislation to European standards. In turn, Darvas et al. (2024) emphasize the long-term economic consequences of Ukraine's membership in the EU, highlighting the need to strengthen regional development and reforms in local self-government. Alesina's study (2023) examines the prospects for relations between the EU and Ukraine, emphasizing interdependence and the importance of strategic partnership. Podorozhna (2015) emphasizes the methodological aspects of constitutionalization, which should ensure the stability of the legal order in the process of reforms. Regarding the political dimension, Folvarčný and Kopeček (2020) examine conservative trends in Central European politics, which is important for understanding the domestic political challenges affecting Ukraine’s European integration. Henriksson (2015) and Lightfoot and Szent-Iványi (2024) analyze foreign aid and policy developments after EU accession, which allows assessing possible scenarios for Ukraine. Regarding the constitutional development of the EU, the works of Ekengren and Jacobsson (2000), Fava (2011), Hartley (1999) and Bogdandy (2003) highlight the complex process of formation of supranational institutions and legal mechanisms that ensure a balance between the sovereignty of member states and common European interests. Finally, Diachenko et al. (2024) describe in detail the reforms implemented by Ukraine in the process of EU accession negotiations, highlighting both achievements and key issues that remain unresolved, such as the fight against corruption and ensuring the rule of law. Thus, key studies confirm that the success of Ukraine's European integration depends on a combination of constitutional reforms, economic development, political stability, and the implementation of European norms into national legislation. This requires both formal legal harmonization and a deep transformation of state institutions and social processes. 4. Research Results The development of modern Ukrainian constitutionalism and municipalism takes place in conditions of a profound transformation of the political and legal space, conditioned by the strategic course of integration into the European Union. As Gomonay (2021) rightly notes, the process of European integration for Ukraine is not limited to a foreign policy vector, but acts as a catalyst for profound changes in the constitutional and legal system, in particular in the sphere of local self- government and the distribution of power. Economic and legal cooperation of Ukraine with the member states of the European Union has a clear regulatory and legal basis, which reflects the evolution of integration processes and their impact on the development of constitutionalism and municipalism. The first fundamental stage was the adoption of the Declaration on State Sovereignty of Ukraine in the Sphere of Foreign Relations (1990), which enshrined the principles of independence in international relations and opened the opportunity for independent formation of a foreign policy course, including a vector for cooperation with the European Community. Further development took place with the ratification of the Partnership and Cooperation Agreement between Ukraine and the European Communities and Baltic Journal of Economic Studies 289 Vol. 11 No. 4, 2025 their Member States (1994), the first comprehensive international treaty that defined the legal framework for political, economic and institutional cooperation. This document initiated the process of gradual harmonization of national legislation with European norms and laid the foundations for reforming municipal governance in accordance with democratic standards. An important step was the conclusion and ratification of the Protocol to the Partnership and Cooperation Agreement and the Framework Agreement (2011), which granted Ukraine the right to participate in EU sectoral programs. This contributed to the deepening of institutional interaction, the exchange of experience in the field of local self-government and the development of constitutional institutions. The breakthrough moment was the signing and ratification of the Association Agreement between Ukraine and the EU (2014), which enshrined Ukraine's large-scale commitments to implement the acquis communautaire. The agreement not only paved the way for the creation of a deep and comprehensive free trade area, but also defined strategic directions for reforming the local government system, ensuring the rule of law, and increasing the transparency of public administration - the basic elements of modern Ukrainian constitutionalism. The most recent instrument is REGULATION (EU) 2024/792 of the European Parliament and of the Council of 29 February 2024, which established the Ukraine Facility. This financial and legal mechanism provides long-term support for reforms aimed at economic stabilisation, institutional strengthening and European integration of Ukraine, with particular attention to reforms of local self-government and the legal system. Thus, the evolution from declarative consolidation of foreign policy independence to an extensive system of legal obligations and financial support mechanisms demonstrates the strategic consistency of Ukraine's European course. The set of these documents forms a normative framework within which the implementation of European standards in the field of constitutionalism and municipalism takes place, while providing the necessary institutional, legal and economic prerequisites for the sustainable development of democratic institutions. Petrov’s (2023) study emphasizes that the peculiarity of Ukraine’s path to EU membership lies in the combination of elements of gradual integration with the need to implement reforms in the extraordinary conditions of martial law. These reforms, according to the Ukrainian Constitutional Court (2024), include the modernization of the constitutional identity of the state, ensuring the rule of law, the development of participatory democracy institutions and the decentralization of power. An important component of integration processes is the development of municipalism as the basis of local self-government. Kokaj and Sinani (2023) emphasize that the EU multi- level governance model creates conditions for the direct participation of local authorities in decision-making at the supranational level, which is especially valuable for Ukraine in the context of decentralization reform. Hnatkovych et al.’s (2023) study confirms that effective regional governance combined with EU financial assistance instruments contributes to the growth of the economic capacity of communities and their institutional resilience. The set of international treaties and cooperation programs creates a multidimensional framework for the integration of European standards into the national system of constitutionalism and municipalism. Lenaerts, Nuffel and Corthaut (2021) consider this process in the context of the evolution of the European Union from an economic community to a political and legal union, which requires from candidates for membership not only economic compatibility, but also political and legal convergence. Therefore, despite significant achievements in the field of economic and legal convergence with the EU, a number of systemic challenges remain unresolved. First, the uneven implementation of reforms in the regions and the imbalance between the level of legal support and the practical implementation of EU norms persist (Diachenko et al., 2024). Second, local governments often demonstrate insufficient institutional capacity to effectively use European financial assistance instruments (Hnatkovych et al., 2023). Third, there is no stable constitutional identity that would harmonize European standards with the Ukrainian legal tradition (Ukrainian Constitutional Court, 2024). In addition, corruption risks and low efficiency of the judicial system persist, which complicates the full implementation of the acquis communautaire (Petrov, 2023; Teremetskyi et al., 2025). The impact of martial law on the pace of integration reforms and the functioning of local self-government creates additional restrictions and requires the development of special legal adaptation mechanisms (Petrov, 2023). One of the key problems is the insufficient level of harmonization of Ukrainian legislation with EU norms, which creates barriers to the full implementation of the principles of constitutionalism and the effective functioning of municipalism. In particular, legislative gaps, inconsistency of the administrative structure, and imperfection of decentralization mechanisms slow down the process of adapting European models. Additionally, the lack of sustainable institutional and financial resources for local governments is a significant obstacle, limiting their capacity to implement reforms in line with European standards. This is also complicated by socio-political challenges, including Baltic Journal of Economic Studies 290 Vol. 11 No. 4, 2025 the impact of the military conflict, which threatens the stability and development of local communities. Another problem is the insufficient level of interaction between the state bodies of Ukraine and European institutions, which hinders the effective use of European technical assistance and support programs. The lack of clear strategies and coordination in the field of constitutionalism and municipalism reforms by the Ukrainian authorities slows down the integration process. In addition, socio-cultural factors, in particular, the different level of legal awareness and political culture among the population and officials, create additional challenges on the path to European integration in the field of local self-government. Taking these problematic aspects into account in the study opens up opportunities for a deeper understanding of existing barriers and the formulation of effective recommendations aimed at overcoming difficulties and accelerating the process of constitutional and municipal transformation of Ukraine in accordance with best European practices. This, in turn, will contribute to the strengthening of economic and legal cooperation with EU member states and the further development of Ukrainian constitutionalism and municipalism. Overcoming these problems requires a comprehensive approach that combines legislative, institutional, and organizational measures. First, to eliminate regional unevenness of reforms, it is necessary to introduce unified standards for the implementation of EU legislation at the local level with mandatory monitoring and public reporting, which will ensure the same quality of law enforcement in all communities. Secondly, increasing the institutional capacity of local governments is possible through a systematic program of professional training, including mandatory modules on financial management, legal frameworks of European programs, and cross-border cooperation instruments. Thirdly, to strengthen constitutional identity, a concept for integrating national legal traditions with European standards should be developed, which may include amendments to the Constitution of Ukraine to enshrine the principles of multi-level governance and subsidiarity. Fourth, the fight against corruption requires strengthening the anti-corruption infrastructure at the local level by expanding the powers of the NACP to monitor the activities of local governments and creating open digital platforms for public control over budget expenditures. Fifth, under martial law, flexible legal mechanisms should be provided for the continuation of European integration reforms, in particular by adopting a special law on the adaptation of local government and public administration procedures in emergency situations. The prospects for studying economic and legal cooperation between the member states of the European Union in the field of development of modern Ukrainian constitutionalism and municipalism cannot be considered without taking into account a number of relevant problematic aspects that significantly complicate the effective integration of European standards into the national legal system. The definition of the legal basis of economic and legal cooperation allows us to state that the main instruments are international agreements with the EU – from the Partnership and Cooperation Agreement of 1994 to the Association Agreement of 2014 and new financial and legal mechanisms, in particular the Ukraine Facility 2024. The impact of this cooperation on Ukrainian constitutionalism is manifested in the modernization of democratic institutions, consolidation of the rule of law, strengthening of guarantees of local self-government. The place of municipalism in the processes of European integration is determined by the concept of multi-level governance, when territorial communities receive direct access to EU programs, which contributes to their economic and institutional capacity. The main challenges are the need to harmonize the legal system with the EU acquis, fight against corruption, adapt reforms to war conditions and prevent institutional fragmentation. The research prospects are outlined in the development of models for the integration of constitutional and municipal reforms, taking into account the experience of Central and Eastern Europe (Lightfoot & Szent-Iványi, 2024; Kokaj & Sinani, 2023). Thus, economic and legal cooperation of Ukraine with the EU member states in the field of development of modern constitutionalism and municipalism is a process that combines legal harmonization, institutional modernization and financial and economic support. The prospects of this process depend on the synchronization of internal reforms with European standards, the preservation of political will and the effective use of assistance mechanisms provided by the EU. The successful implementation of these tasks will create the prerequisites not only for formal membership in the EU, but also for the deep integration of Ukraine into the political and legal space of a united Europe. 5. Conclusions As a result of the study of economic and legal cooperation of EU member states in the field of development of modern Ukrainian constitutionalism and municipalism, the following conclusions were made. 1) The study carried out a number of tasks that allowed for a comprehensive consideration of the impact of economic and legal cooperation between Baltic Journal of Economic Studies 291 Vol. 11 No. 4, 2025 Ukraine and the EU countries in the field of constitutionalism and municipalism. First, a detailed analysis of the current state of this cooperation was conducted, which revealed significant positive developments in the implementation of European norms and standards in Ukrainian legislation and local government practice. In particular, it was found that cooperation with the EU stimulates the modernization of Ukrainian constitutional institutions and contributes to the development of innovative mechanisms of municipal governance, increasing the efficiency and transparency of local authorities. 2) The study confirmed the significant influence of European legal standards on the development of Ukrainian constitutional law and local self-government. The implementation of the principles of subsidiarity, rule of law, decentralization and democratic control over local authorities has become an important factor in the transformation of the national legal system. In addition, European approaches contribute to the harmonization of Ukrainian legislation with EU norms, which is a necessary condition for further integration. 3) A number of problematic issues and obstacles that slow down the process of adapting European approaches in the national system of constitutionalism and municipal governance have been investigated. Among them are the insufficient level of legal culture, institutional weakness of local authorities, fragmentation of reforms, and resistance from some political and administrative circles. At the same time, potential ways to overcome these challenges have been identified, in particular, strengthening legal education, increasing the competence of municipal employees, as well as intensifying international cooperation and support. Thus, the scientific study confirmed that the economic and legal cooperation of the European Union member states plays a key role in the development of modern Ukrainian constitutionalism and municipalism. This influence is multifaceted, covering both regulatory and legal harmonization and practical implementation of European standards, which contributes to improving the quality of governance and strengthening democratic institutions at the local level. At the same time, the implementation of European integration goals requires further systemic improvement, which includes overcoming existing barriers and implementing strategic recommendations developed within the framework of this study. Regarding further research directions, we consider an important direction to be the study of the impact of economic and legal cooperation on the development of the institutional capacity of local authorities. This involves studying the effectiveness of technical assistance programs, training and exchange of experience between Ukraine and EU countries, as well as assessing the role of financial support in the formation of sustainable models of municipal governance. 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