Hungary’s Keystone Gamble: Balancing East and West in a Multipolar World

As Hungary defies Western consensus and pursues a balanced foreign policy between Russia, China and the EU, its unique “keystone state” strategy offers a glimpse into the future of small-state diplomacy in a multipolar world.

Hungary’s foreign policy has long confounded observers in the West, especially as it diverges sharply from the mainstream positions held by its European Union and NATO allies. While most of Europe has taken a firm stance against Russia following the invasion of Ukraine, Hungary has maintained a different course — one that prioritizes energy security and open dialogue with Moscow. Furthermore, Hungary’s pursuit of closer ties with China has drawn criticism from the United States, adding another layer of complexity to its foreign relations. This approach raises questions: What is Hungary up to? How does its government justify this divergence from Western consensus?

At the heart of Hungary’s strategy is an ambitious vision of becoming a “keystone state” — a framework for navigating and even bridging the competing interests of major powers while preserving and enhancing its national sovereignty. I personally know much about this issue. After all, although Budapest has been trending in this direction for several years now, it was I who first introduced the concept of a keystone state into the Hungarian foreign policy lexicon in early 2022.

Originally articulated by U.S. Naval War College professor Nikolas K. Gvosdev in 2015, a keystone state is characterized by its ability to integrate and provide coherence to a region — whether by promoting stability or conversely contributing to regional insecurity if destabilized. Such a state occupies a strategic nexus in global systems, often overlapping the spheres of influence of multiple major powers, serving as both a connector and a mediator between these powers.

Much of this depends upon geography. Consider, for instance, Azerbaijan, perhaps the best example of a successful keystone state in the world today. Situated at the intersection of the historical spheres of the Russian, Turkish and Persian empires (modern-day Iran), it serves as a pivotal part of the Middle Corridor, which connects Europe with the Middle East and Asia. Likewise, its substantial energy reserves (7 billion barrels of oil and around 60 trillion cubic feet of natural gas) and infrastructure link regional markets. However, these assets also present vulnerabilities: Azerbaijan is an attractive target for major powers and actors, as its alignment with any one side could significantly alter regional dynamics — and potentially the global balance of power. Consequently, Baku’s official policy — described by Hikmat Hajiyev, assistant to Azerbaijan’s president, as a “multi-vectoral foreign policy” — aims to protect national interests while balancing relations with its powerful neighbors (Russia, Türkiye, Iran) as well as current global powers (the United States, Europe and China). This approach has helped maintain relative peace and stability in the region in terms of great power rivalry.

Hungary exists in a comparable situation, geographically situated between overlapping spheres of influence of Russia, the West (primarily represented by the EU and NATO), and Türkiye. This unique positioning provides Budapest with opportunities and challenges to leverage its connections and diplomatic potential to act as a mediator and key transit point in a turbulent region. This is particularly relevant given the shifting alliances and economic interests now at play in Europe.

It is in this context that I introduced keystone state theory to a Hungarian audience. The concept was swiftly embraced and expanded upon by Hungarian officials, most notably by Balázs Orbán — Prime Minister Viktor Orbán’s (no relation) political director. This is evident in his writings, most notably in his latest book Hussar Cut: The Hungarian Strategy for Connectivity. In it, Balázs argues that Hungary’s foreign policy is fundamentally connectivity-driven, emphasizing a “connectivity-based strategy” that seeks to maximize Hungary’s relationships beyond the traditional confines of EU and NATO partnerships. He outlines Hungary’s need to utilize its geographical, cultural and economic circumstances to enhance its status as a keystone state. By focusing on infrastructure that supports connectivity and advocating for a diplomatic stance that remains open to all sides, Balázs writes, Hungary has aimed to ensure its central role in regional stability, particularly at a time when Europe is facing significant uncertainty due to the war in Ukraine and the broader decoupling trends influenced by U.S.-China rivalry.

The circumstances that Balázs mentions are multifaceted. Hungary’s geographical location, for one, makes it a gateway between East and West, facilitating trade routes and energy transit that are vital for broader Eurasian and European integration. Projects like the Budapest-Belgrade-Piraeus cargo railway and the East-West Gate Terminal, Europe’s largest intermodal railway terminal with 5G facilities, are not just infrastructure developments but strategic investments that underscore Hungary’s ambition to be a central hub for trade and logistics. These initiatives reflect a deliberate strategy to increase Hungary’s importance in connecting the European continent with broader Eurasian economic systems.

Energy connectivity is another key aspect of Hungary’s keystone role. Hungary’s reliance on Russian energy — manifested through infrastructure like the TurkStream gas pipeline and other interconnectors — has been a critical element of its foreign policy stance. Despite criticism from its European allies, Budapest has taken a realist approach, emphasizing energy security and economic stability over ideological alignment. This insistence on maintaining these energy relationships despite the conflict in Ukraine and pressure from NATO and EU partners is indicative of a broader strategic posture that seeks to keep the country’s options open.

Diplomatically, Hungary has maintained an intriguing balance. While it is committed to NATO and the EU, Budapest has been vocal in its opposition to what it perceives as overreach by European institutions, particularly concerning cultural and political values. Prime Minister Orbán has articulated a vision of Hungary as an “illiberal democracy,” which, while certainly contentious within the EU, is part of a broader strategy to assert Hungary’s independence and define its role on its terms. This stance has drawn criticism, particularly from Western European nations, but it has also gained Hungary recognition as a country willing to challenge the status quo — a position that strengthens its role as a potential mediator and independent actor in the region.

One of the more concrete examples that illustrates Hungary’s keystone potential is its stance during the ongoing Russo-Ukrainian War. Hungary’s refusal to fully align with EU sanctions against Russia and its decision to secure additional gas supplies from Gazprom reflect a calculated move to protect its national interests while maintaining a balanced relationship with Russia. Such actions, while controversial and provocative within the EU, demonstrate Budapest’s intention to act as a connector rather than a divider — keeping diplomatic channels open where others have closed them. This strategy aligns with the keystone state’s role as an integrative force — one that maintains relationships across geopolitical divides, even when such positions are unpopular.

The idea of a keystone state also entails resilience in the face of external pressures. Hungary has shown resilience by navigating its membership within the EU and NATO while simultaneously fostering ties with non-Western powers. This balancing act requires a foreign policy that prioritizes national sovereignty and pragmatic decision-making. Hungary’s government, as Balázs Orbán outlines, believes that its historical experience as a nation situated at the crossroads of empires gives it the perspective needed to navigate these complexities effectively.

The keystone state concept provides a framework for Hungary to engage with multiple actors without succumbing entirely to any one of them. It implies a level of autonomy that allows Budapest to maneuver diplomatically in a manner that benefits its national interests. Hungary’s unique cultural position — “headed toward the West but coming from the East,” as Balázs Orbán describes it — further supports this role, allowing it to bridge divides that are otherwise widening in Europe and beyond. In a global landscape increasingly defined by multipolarity and strategic competition, Hungary’s approach represents a microcosm of the broader challenges and opportunities faced by certain states that do not fit neatly into the larger power blocs.

Yet while the keystone state role offers Hungary an opportunity to punch above its weight in international affairs, it also presents significant risks. The very flexibility that allows Hungary to serve as a mediator can also make it vulnerable to pressures from larger powers. Its position could be compromised if broader regional dynamics shift in ways that Hungary cannot control, especially if tensions between Russia and the West continue to escalate. Moreover, Hungary’s independent stance has led to friction within the EU, which could undermine — if not destroy — its ability to act effectively as a keystone if it finds itself isolated from its Western allies.

Nevertheless, the Hungarian leadership appears committed to this vision, framing Hungary not as a small, peripheral state at the mercy of larger forces but as a strategic actor capable of influencing outcomes in its neighborhood. The keystone state concept provides a way for Hungary to conceptualize its ambitions in a manner that is both realistic and strategic, given its size and resources.

Foreign policy scholars and analysts would do well to examine Hungary’s strategy more closely, particularly as the world transitions into a multipolar era. As traditional alliances and power dynamics shift, Hungary’s approach — focused on maintaining diverse connections and balancing competing interests — offers a potential model for smaller states seeking autonomy and influence in an increasingly complex geopolitical environment. While not without risks, the keystone state strategy provides valuable insights into how certain nations can navigate global pressures while safeguarding their own sovereignty and advancing their national interests.

[Photo by Kat Dodd from Shropshire, UK, CC BY 2.0, via Wikimedia Commons]

The views and opinions expressed in this article are those of the author.