The State of Democracy 2025: Fake news, lack of accountability, extremism and corruption seen as top threats to democracy across Europe and the US

An Ipsos survey across nine European countries and the US reveals widespread dissatisfaction with democratic governance and significant concern for its future over the next five years, with France and Spain showing particularly high levels of worry. The primary threats identified are fake news, political accountability issues, extremism, and corruption, leading to a strong desire for reforms like enhanced anti-corruption laws and independent judiciaries. This pervasive discontent, alongside a perception of rigged economic systems and support for radical change in several nations, signals elevated political risk and potential for policy instability that could impact market predictability and investment strategies.

Analysis

An Ipsos survey across nine European nations and the US reveals pervasive dissatisfaction with democratic governance, with over half of respondents in Spain, the UK, Italy, France, Croatia, and the US expressing discontent. Satisfaction has notably declined in the Netherlands (12 points since 2024) and France (6 points since 2024), reflecting recent political instability and government collapses. Furthermore, clear majorities in all countries except Sweden are worried about the state of democracy in the next five years, particularly in France (86%) and Spain (80%).

The primary threats identified include fake news, lack of political accountability, extremist parties, and corruption, with regional variations such as fake news being a top concern in Northern Europe and corruption in the US (63%) and Southern Europe. This widespread concern translates into strong support for policy interventions, including stronger anti-corruption laws and enforcement (e.g., 78% in Croatia, 76% in Spain) and enhanced social media regulation (e.g., 58% in Netherlands, 55% in France).

A significant proportion of respondents believe the economic or political system is rigged in favor of the rich and powerful, leading to substantial support for radical change in countries like Croatia (69%), France (66%), and the UK (60%). While there is a strong desire for change, majorities still prefer consensus-building political leaders and believe voting can influence outcomes, indicating a complex interplay between systemic discontent and continued belief in democratic processes.

Key Decisions for Investors

• Investors should closely monitor political developments and policy shifts in these regions, particularly in countries exhibiting high dissatisfaction and support for radical change, as these trends indicate elevated political risk and potential for policy instability.
• Evaluate potential impacts of anticipated regulatory changes, especially concerning anti-corruption measures and social media governance, which could affect industries reliant on information flow or operating in highly regulated sectors.
• Consider the long-term implications of pervasive societal discontent and the desire for systemic change, as these factors could influence economic stability and investment predictability across these key economies, despite a low immediate market impact score.