Island in the neoliberal stream: energy security and soft re-nationalisation in Hungary

Abstract

Since 2010, the Hungarian Government has increased its stake in the country’s energy sector at the expense of foreign-owned energy companies. This ‘soft re-nationalisation’ is driven by both exogenous and endogenous factors, especially the country’s external dependence on gas imports, its previous commitment to a European model of energy liberalisation, public dissatisfaction with high energy prices and the emergence of an ‘illiberal state’. The case of Hungary’s ‘soft re-nationalisation’ yields two central findings. Firstly, conceptually, there is a need to move away from just focusing on the radical re-nationalisation of energy in the form of resource nationalism, and instead understand re-nationalisation as consisting of a broad spectrum of state interventions into the energy market. Secondly, Hungary’s recent ‘statist turn’ in the energy sector highlights inherent tensions within EU energy policy as it threatens attempts to establish a fully liberalised and marketised energy market across the continent.

Keywords:

• Re-nationalisation
• Hungary
• energy security
• illiberal state

Notes

1. It should be noted that while there has been the emergence of some online analysis related to the soft-renationalisation of energy in non-exporting states in recent years, there has been no discussion in mainstream scholarship. When it comes to the re-nationalisation of energy, scholarship focuses on resource nationalism in energy-exporting states.

2. The AGRI is a proposed project to transport gas from Azerbaijan through Georgia to Romania and then further into Central Europe. The project remains in the very early stages, it is potentially very expensive and represents a huge undertaking which could take years to complete if all parties involved eventually agree to terms.

3. It is perhaps misguided in the sense that currently no construction project exists which can concretely fulfil the Hungarian Government’s goal in respect of being a regional hub for energy distribution.