Same but different: Rosatom as the Kremlin’s upcoming leverage?

ABSTRACT

Russia’s relations with the EU have worsened over the past decade, and energy-related issues have been part of this regress. The attention has been mostly turned to natural gas and Gazprom, while Rosatom, another state-controlled energy giant, has been largely overlooked, although it may be the next vehicle fostering Russia’s foreign policy goals. To find out whether this is the case, Hungary and Finland were chosen as case studies to determine whether Rosatom serves as leverage for Russian political influence. The research utilized the authors’ analytical model to find manifestations of strategic behavior, pointing at political leveraging of the deals in point. The findings revealed that Russia could use Rosatom’s nuclear deals as vehicles for its foreign policy goals. The outcome is, however, case-specific, depending on the leeway given by the host country.

KEYWORDS:

• Rosatom
• Russia
• energy geopolitics
• nuclear energy
• Hungary
• Finland

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. That is, projects where the contract was already awarded and the construction process was either ongoing or being prepared at the time.

2. The use of oil and gas as a leverage was evidenced in several cases by, e.g. Orbán (2008), Högselius (2013), or Henderson and Moe (2019). See below in the following chapter.

3. Build-Own-Operate or Build-Own-Operate-Transfer – the business model under which the contractor is tasked with building and subsequently operating the facility, while being also the owner. The model is offered to newcomers in the sector, who do not have the expertise to procure construction nor have enough skilled staff to operate such facilities. After the constructor/operator earns enough revenues to compensate for the construction costs, plus agreed profit, the facility is transferred to the host country/partner institution (Hayes, 2022).

4. In 2016, Russia suspended granting any new loans to foreign countries as a forced reaction to Western sanctions after the Crimea annexation. However, Russian nuclear industry is still not burdened with sanctions, thus allowing Russia to play the Rosatom card in the world and even in Europe.

5. This is very different to Hungary, where the relation was forged on the level of top state representatives (see the respective section), and where the new reactor is set to be more important for the power supply.

Additional information

Funding

The paper was funded by the Masaryk University research project “Perspectives of European Integration in the Context of Global Politics VI” (MUNI/A/1475/2023).