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Home » Focus, Hungarian EU Presidency

Hungary energised for the task ahead

Submitted by on 30 Nov 2010 – 12:45

The European Energy Programme for recovery was conceived to support projects that strengthen the European gas pipeline network.

By Dr Eamonn Butler, University of Glasgow, and Dr Csaba Töro, Hungarian Institute of International Affairs

Energy has long been recognised as a matter of high concern for the European Union. This was reflected in the joint programme of the 2010-2011 EU Presidency Trio (Spain, Belgium and Hungary) where energy was presented as a common theme linking all three presidencies. As this trio comes to an end with the Hungarian Presidency which runs from January to June 2011, the spotlight continues to shine on energy matters with the issue of Europe’s aging and fragmented energy infrastructure being identified as a priority action area. This is an issue that Hungary, as a landlocked country with limited natural resources and high reliance on energy imports, is keen to see developed.  Hungary recognises that holding the EU presidency offers it an opportunity to further not only its own national interest in this matter but to promote the wider central and east European desire to complete a important aspect of their economic integration with the rest of Europe.

The preliminary priorities outlined in the EU Energy Action Plan (2011-2020) indicate that the north-south interconnections in central, eastern and south-eastern Europe are considered as one of the focal points of planned improvements. The Hungarian government firmly supports this strategic priority stressing that the accomplishment of new connections between the electricity grids and gas transport networks in the four Visegrád (V4) countries (Poland, Hungary, Slovakia and Czech Republic) as well as other states across south-eastern Europe and the Baltic region constitutes an indispensable requisite for the creation of regional energy markets and greater security of supplies. The construction of energy pathways across the V4 area could also form vital links in the chain of interconnections from the Baltic to the Adriatic Sea.  This is something that Hungary is likely to promote with the view to its fellow Visegrád state, Poland, continuing to support the position during the second half of 2011 when it takes over the EU presidency.

In recent years there has been a clear development in the consolidated practice of the central and east European EU members with regard to energy matters.  The most recent example being the Budapest V4+ Energy Summit held in February 2010. The EU presidency offers a new platform to enhance this consolidated practice and Hungary recognises that the co-ordination and representation of central and east European energy interests within the context of its own and future EU presidencies provides the opportunity for significantly increasing the successful promotion of regional priorities within a broader European perspective.

With respect to the intra-European side of EU energy infrastructure development, Hungary views the expected improvements in the connections between national components of the current system of energy networks as crucial, not only for the expected benefits of reinforced security of supply, but also from the perspective of market functionality. New bonds between separate national energy markets could dissolve the existing isolation of “energy islands” within the EU. Enhanced connectivity between national grids and pipeline networks could effectively contribute to the creation of a properly functioning integrated system of energy markets as another manifestation or stage in the evolution of a Single European Energy Network.

In an era of economic uncertainty, the financial demands of building this new energy networks have also not gone unnoticed.  Fully aware of the reluctance of private market participants to invest in costly infrastructure projects with less than firmly predictable profitability, Hungary supports the increased use of public resources for that purpose. It will use its presidency to push for national and EU funds to be funnelled to energy infrastructure projects aimed at increasing both security and competitiveness in energy matters across the Union.

In pursuit of the shared benefits of energy infrastructure developments, Hungary could support various solutions; either the creation of new separate EU financial sources assigned to energy policy purposes or the use of already available financial instruments such as cohesion or structural funds in an innovative redirection or redefinition of regional development.  The European Energy Programme for Recovery (adopted in 2009) and conceived to support projects that strengthen the European gas pipeline network represents an innovative and combined approach to the provision of financial underpinning of infrastructure projects in the energy sector.  This is the sort of project that Hungary sees as an instructive example of the targeted use of EU sources for improvements in the structural conditions of shared energy interests.

Although a matter of great national interest, Hungary recognises the importance of energy for the whole of Europe. It also recognises that as leading central european state and upcoming host of the EU presidency it possesses a unique and high profile opportunity to promote a central european perspective on the EU’s future energy infrastructure, because at the end of the day central Europe will form the crossroads of that energy network.