This article explores the financialisation of Brussels Airport following the acquisition in 2004 of a majority stake by the Australian Macquarie Bank. Adopting a variegated capitalism perspective, we argue for a greater sensitivity to the mutually constitutive relation between durable institutional governance structures and financialised practices injected by global investors. The case of Brussels Airport presents an informative case to examine this relation, as Macquarie has had to continuously interact with the Belgian federal state in its different guises of contractor, co-owner and regulator to implement financialisation. While Macquarie indeed brought in risks that are structurally associated with profit making through financial means, the governance of these practices is shaped by the Belgian state’s distinctive and pragmatic approach to infrastructure privatisation: the state enables these practices, but also contests them in case of a direct clash with its interests. Meanwhile, the regulatory environment marks the contradictory meeting point of two varieties of capitalism: while the light-handed regulatory framework is inspired by the UK’s airport industry, the Belgian regulator does not possess similar abilities as a UK regulator, and resultantly, informal negotiations between the stakeholders are more influential in the airport’s governance. The case of Brussels Airport shows that the state plays an active role in constituting global capitalism, yet also shapes how financialisation works out on the ground. To understand the tensions that mark the governance of financialised infrastructure, it is therefore imperative to be sensitive to the local, historical and political trajectories that underwrite the variegated outcomes of financialisation.

This article examines how a restructuring local state repurposes existing government vehicles to navigate financial stress. Witnessing the changing use of intermunicipal companies (IMCs) by municipalities in Flanders (Belgium), we put empirical flesh on the bones of what we conceptualize as the extended local state. Our argument is that, while IMCs were set up to organize energy and water systems, several rounds of state restructuring have repurposed them into safety valves for municipal finance. As our analysis shows, austerity, devolution and budgetary control at the municipal level have been paralleled by an inflation of IMC debt, which, given the strategic importance and state ownership of IMCs, can be interpreted as off‐balance‐sheet local state debt. IMCs have also taken on new roles as vehicles for debt‐driven state investment and tax regulation workarounds. In effect, the local state is an active agent in installing practices of regulatory arbitrage and through IMCs it is connecting, albeit largely unwittingly and haphazardly, to financial market dynamics. While such exposures are limited compared to cases where financial markets alter municipal statecraft profoundly, when unchecked, these acts of institutional bricolage may eventually function as Trojan horses installing value extraction from public services in Flanders.

This case study unravels the ambiguous position of public energy distributor Fluvius in dealing with strategic regional transition challenges. It enriches current understandings of spatial transition dimensions and of public regime actors’ role in transitions, by unravelling the territorial and institutional embeddedness of regional energy distribution systems. We disentangle three controversies in Flemish energy distribution, centred around the spatial concepts of density, spatial selectivity and socio-spatial redistribution. This spatial lens reveals the implicit spatial logics and inherently political character of transforming regional distribution systems. We conclude that a fundamental energy transition requires more inclusive governance, and an ambitious spatial transition vision.

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According to political economists, the state’s governance of infrastructure is becoming prone to processes of financialization. To date, however, research on how state owners of infrastructure enable and react to the entry of financial logics into such domains remains limited. This paper mobilizes the case of Eandis, a Flemish energy grid company, as a typical case to examine the causal mechanisms involved when state-owned utilities become subject to financial logics. During the 2000s, Flemish municipalities increased their ownership of Eandis, while the company deepened its debt exposure to optimize return on capital. In 2016, Eandis aimed to attract private financial equity and selected a Chinese investment fund as a potential co-shareholder. Although this buy-in was blocked, the conditions under which the state-owned company became increasingly entangled with financial markets remain unchanged and warrant a deeper examination. To explain this trajectory, we identify two causal mechanisms in the fields of market-making and ownership strategies by the multiscalar state. First, we show how regulatory models caused Eandis to focus on financial metrics such as credit ratings, subjecting management to financial market disciplines. Second, we find that budgetary constraints, combined with top-down utility governance, have made municipalities dependent on financial returns on utilities. The interaction between market-making and financial ownership strategies institutionalizes a financialized gridlock, in which municipal shareholders’ interests conflict with the need for low consumer fees and green grid investment. We argue that reforming the regulatory framework and strengthening fiscal solidarity across state layers would allow states to develop non-financialized strategies.