The statement, signed by the British, French, Dutch, Belgian, German and Swedish ambassadors, comes days after Rwanda announced plans for a referendum to change the constitution, a move that would amend term limits and could see President Paul Kagame stay in power until 2034.
Rwanda's Justice Minister Busingye Johnston said the country was "tired" of allegations that it stifles the press and political opponents.
ADVERTISINGKagame has won widespread praise for rebuilding the country after the 1994 genocide killed about 800,000 people, most of them ethnic Tutsis and moderate Hutus.
But Kagame, in power since 2000, has also come under fire from rights groups who say the economic progress since 1994 has gone hand-in-hand with an autocratic approach that has suppressed dissent and limited freedom of expression.
"We have continuing concerns in the areas of freedom of expression and freedom of media, civil society development, freedom of association and other areas related to political rights," the European heads of mission in Rwanda said in an open letter marking the 2015 Human Rights Day.
"We encourage further opening of the political space and development of greater freedom of expression," said the statement.
"These are prerequisites for open political debate and the participation of citizens in the democratic choices they will be called upon to make."
Johnston dismissed European concerns, saying Rwandan media had expanded in recent years and the country boasted opposition parties which can challenge the government.
"These things are sweeping statements that we are so tired of," he told Reuters. "That kind of statement is completely untrue."
Rwanda, which relies on aid to fund part of its budget, has clashed with donors in the past. In 2012, several major donors froze aid after United Nations experts accused Rwanda of backing rebels in neighboring Congo.
(Reporting by Clement Uwiringiyimana; writing by Drazen Jorgic; Editing by Janet Lawrence) at http://www.reuters.com/