East-Central and Southeast Europe

Political transformation in the region presents a mixed picture. Albania and Latvia have reached new democratic highs, while Poland has been undoing the damage of the PiS years since the change of government in 2023. At the same time, despite growing opposition, backsliding has deepened in Hungary and Serbia. Serbia has fallen below minimum democratic standards in terms of elections and freedom of expression and is classified as a moderate autocracy in the BTI for the first time. In Hungary, Serbia and also in Slovakia, pro-Russian and increasingly authoritarian leaders are shaping the political climate, while in Romania, polarization is being exacerbated by external interference in elections.

Economically, the region has managed to remain stable despite difficult conditions. Deficits and political instability weigh on some countries, yet nearly half recorded new peaks in economic transformation. Poland showed particular improvement due to strong economic performance, and Montenegro, with its now significantly more stable finances, and Slovenia, with its better-developed social security systems, also made remarkable progress. Particularly significant is the sharp decline in regional dependence on Russian gas since the start of the war against Ukraine.

Societal polarization and geopolitical tensions increasingly put compromise-oriented governance to the test. This is clearly visible in Slovakia, where Prime Minister Robert Fico bypasses consensus-building and disinformation poisons public debate. Romania and Serbia in particular are also increasingly moving away from a democratic consensus on goals, following in the footsteps of Hungary. By contrast, Poland under Donald Tusk has markedly improved governance, placing it alongside the Baltic states and the Czech Republic among the strongest performers in the region.