This study examines the content of European nationality stereotypes held by adolescents from six Central and Eastern European countries and in-group favouritism on the dimensions underlying these nationality stereotypes. It was found that the content of nationality stereotypes reflects a competence and a morality dimension, and that each dimension is related to perceived structural or relational features of nation states. The attribution of competence-related traits to out-group nationalities is strongly related to the perceived economic power of the nation states and the attribution of morality-related traits to the size of the nation states, as well as perceived conflicts of interests, nationalism and economic power. The participants did not blindly favour their in-group over all foreign nationalities on competence or morality. The tendency to perceive Western European nationalities as more competent than the in-group reflects a social reality constraint due to lower economic status. Furthermore, in-group favouritism on competence decreased as a function of the economic status and size of out-groups, while ingroup favouritism on morality increased as a function of economic status and size of out-groups. These results are interpreted in terms of self-categorization theory and social identity theory.