PM Orban Sent IMF Packing—Now the Austerity Hawks Eye a Comeback through Tisza

The economic platform of the Tisza Party mirrors almost word for word the austerity prescription of the International Monetary Fund (IMF): higher taxes, lower pensions, and the elimination of household energy subsidies. After 2010, the Orban government showed the IMF out and instead began to reduce taxes and household utility costs. Now, the global lender appears ready to return to Hungary—this time on the coattails of Peter Magyar and his Tisza Party.

Tisza Party chief Peter Magyar (Photo: Sandor Csudai)

In a recent report, the International Monetary Fund (IMF) is once again calling for sweeping austerity across Europe, warning that without such measures, nations on the continent could face a “debt explosion.” The IMF’s European director, Alfred Kammer, stated that aging populations, rising health and defense expenditures, and growing energy security costs will place unbearable strains on state budgets.

The Tisza Party's economic program follows the International Monetary Fund's (IMF) austerity measures practically verbatim (Photo: AFP)
 

The IMF subsequently recommends a 3.5 percent cut in public spending over the next five years—particularly in countries such as France and Belgium. For Central and Eastern Europe, and especially for Hungary, the IMF prescribes a different “remedy”: tax hikes. Specifically, the organization promotes a progressive tax system and higher personal income tax rates. But that’s not all—the IMF also urges welfare reforms: raising the retirement age, increasing household energy and healthcare costs and reducing state subsidies.

Tax Increases—and More Tax Increases

According to the IMF, Eastern, Southeastern and Central Europe—Hungary included—still have “room” for further tax hikes and austerity, particularly in personal and corporate taxation. The Fund’s report argues that Hungary’s tax rates remain low, implying there is “fiscal space” to raise them—a tacit acknowledgment of the Orban government’s success over the past decade and a half in cutting taxes and leaving more money in the hands of Hungarian families. Those savings, in turn, have flowed into retail, hospitality, and household consumption, strengthening the domestic economy.

If implemented, the progressive income tax proposed by the Tisza Party would be among its most damaging economic measures. Previously leaked plans suggest that the current flat 15 percent personal income tax would remain only for a narrow group earning under five million forints per year (roughly €13,000). Above that, workers would face a 22 percent tax rate on incomes over 416,000 forints (approx. €1,080) per month, and 33 percent on incomes above 1.25 million (approx. €3,238). Reports also indicate the party would triple the corporate tax rate and impose steep, tiered taxes of 20 to 40 percent on investment income.

IMF, Tisza Party Say 13th-Month Pensions Are a Problem

The IMF isn’t stopping at tax hikes. It’s also demanding pension reforms—raising the retirement age and cutting benefits. Strikingly, similar ideas are being articulated by Tisza Party-linked economists. Economist Andras Simonovits has floated the idea of taxing pensions and scrapping the “Women 40” early retirement program, while Maria Zita Petschnig has publicly questioned the affordability of the 13th-month pension—echoing the IMF’s own 2021 report, which labeled the extra payment a “budgetary burden.”

The Hungarian government, however, takes the opposite approach—standing by retirees rather than global bankers. As Prime Minister Viktor Orban recently announced, Hungary is not only continuing the 13-month benefit but is also introducing a 14th-month pension, “no matter how much the international bank network dislikes it.”

IMF Targets Utility Price Cuts

A September 2025 IMF report criticized Hungary’s household utility price reduction program, arguing that it delays the phase-out of fossil fuels and discourages energy-saving behavior. That same argument has been echoed by members of the Tisza Party. As Gabriella Gerzsenyi, Tisza’s MEP, stated: “What would really help households would be to encourage savings—right now, since energy is cheap, people aren’t motivated to reduce consumption.”

The Hungarian government, however, has held since 2012 that true protection for families comes from keeping the share of income spent on utilities as low as possible. And the results speak for themselves. According to a recent Szazadveég Foundation survey, 22 percent of Europeans cannot adequately heat their homes, and 26 percent have failed to pay utility bills at least once in the past year due to financial hardship. Hungary ranks among the least affected countries in both categories within the EU.

As for the IMF’s dream of eliminating fossil fuels by 2030, that goal is not just unrealistic for Hungary—but for every EU member state. What’s more, Hungary now boasts over 300,000 household solar systems—up from only about 2,500 in 2012—thanks largely to government support. Far from abandoning families, the Orban government has invested heavily in sustainable energy while protecting affordable living costs.

PM Orban Sent the IMF Packing

It’s worth recalling that back in 2008, to avoid state bankruptcy, the then Gyurcsany government took out a 20-billion-euro bailout package—14 billion of which was drawn—mostly from the IMF, with additional funds from the World Bank and the EU. The price was brutal austerity: the following Bajnai government imposed sweeping cuts, including abolishing the 13th-month pension. 

When Viktor Orban’s Fidesz-led alliance came to power in 2010, it broke sharply with the policies of the socialist-liberal era. The new government overhauled Hungary’s tax and welfare systems to favor work, families, and investment. As PM Orban later recalled in a 2019 interview: “Brussels demanded austerity. In response, we sent the IMF home and cut taxes. They wanted the banks to crush mortgage borrowers—we made the banks pay instead. Brussels told us to admit migrants—we built a fence and said no to mandatory quotas.”

By the summer of 2013, Hungary had fully repaid its IMF loan ahead of schedule—2.2 billion euros—an unprecedented move in IMF history for any European country.

Cover photo: Tisza Party chief Peter Magyar (Photo: Sandor Csudai)