Resilience of Municipally Owned Utility Companies : A Hungarian Case

Sági, Judit and Lentner, Csaba (2025) Resilience of Municipally Owned Utility Companies : A Hungarian Case. EUROPEAN COMPANY AND FINANCIAL LAW REVIEW, 22 (5-6). pp. 1-21. ISSN 1613-2548

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Abstract

Utility companies play a crucial role in the functioning of modern society, and understanding their resilience is essential to ensure the continuous provision of basic services. They also maintain an unbroken chain of supply and the going concern principle. Our study examines the resilience of Hungarian, municipally owned utility companies, with particular focus on security of supply and financial stability. This research presents the environmental obligations of utility companies, the effects of regulatory changes, and the strengthening role of the state over the past decade and a half. It analyses corporate profitability and the challenges posed by the COVID-19 pandemic. The study highlights that adaptive regulatory frameworks and appropriate financial strategies can increase the resilience of utility companies, ensuring service continuity even in crisis situations. The post-2010 Hungarian state model, operating on statist principles where the government assumes a significant role in economic governance and public service provision, has increasingly faced challenges and limitations during the critical economic years since 2020, which may call into question the efficiency and sustainability of this model. The unique contribution of this study is its analysis of utility company operations in the Hungarian economy as it transitioned from a planned to a market economy, focusing specifically on a period of a decade and a half when public ownership and state regulation regained ground within the market economy model.

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