The London Review of Books has a review of a book between two scholars, Old Thiess, a Livonian Werewolf: A Classic Case in Comparative Perspective. The crux is the case of a 17th-century werewolf:
On a spring day in 1691, in what is now the town of Cēsis in Latvia, a group of local men waited to give testimony in a provincial courtroom. The case was unremarkable: a theft from the local church. One by one the men were called up by the judges, who were wealthy members of the German-speaking elite. When an old man called Mātiss took the stand, the judges noticed that the local innkeeper, who had already been questioned, was smiling. Asked why, he replied that he was amused to see ‘Old Thiess’, his neighbour and tenant, swearing on the Bible, since ‘everyone knows he goes around with the Devil and was a werewolf.’
That he was a werewolf seems to have been common knowledge and Thiess himself freely admitted it – in fact, he said, it wasn’t even the first time it had been mentioned in court. Ten years earlier, he had been questioned about his broken nose and had explained to the court that a neighbour had struck him with a broomstick while they were both in Hell. The judges then had laughed and let him go. But in Cēsis, the court changed tack from the church theft and embarked on an interrogation of the werewolf.
The review discusses the contrasting views of the authors, Carlo Ginzburg, who argues that belief in werewolves is evidence of a pan-European pagan substratum that persisted down to early modernity, and Bruce Lincoln, who suggests that these individuals are “persons of a subaltern group, accused by a powerful court,” and they by asserting their werewolf status they are “affirming their own dignity and benevolence.”
Ginzburg represents an old-fashioned view that magic and non-Christian traditions represent folk paganism, while Lincoln seems to make recourse to more modern ideas relating to structural relations of class and ethnicity. The elite of Livonia at the time was German-speaking, while the peasants were invariably Estonian or Latvian (as we’d call them today).
On Twitter, Francis Young, who is a scholar of Lithuanian paganism, argues that it is likely that the idea of shape-shifters comes from the Estonians (Thiess seems to have been a Latvian). He says there are no traditions of werewolves in his study of native Baltic (Lithuanian and Latvian) paganism. This matters obviously in light of Ginzburg’s assertion of a pan-European pagan tradition that likely goes back to the early Indo-Europeans. If it was a local borrowing from Finnic people, then Ginzburg is wrong in the proximate sense.
I have a slightly different take. In Tracing the Indo-Europeans Dorcas Brown and David Anthony have a chapter where they document a ritual sacrifice of 50 dogs and half a dozen wolves by the Srubna people nearly 4,000 years ago. This was probably an initiation of a koryos, an Indo-European “Mannerbund” (though these would be adolescents). The koryos are commonly depicted as wolves or dogs in Indo-European folklore and are described as such in sources as diverse as the Vedas and the custom of the Greek ephebeia. Young is surely correct about Baltic pagans, this is after all his specialty. But, I would note that werewolves have an ancient Indo-European basis, and the Finnic people were influenced by Indo-Europeans, in particular Balto-Slavs and Indo-Iranians. The Finnish sky-god Ukko is clearly Baltic Perkunas and Vedic Varuna. Though it is unparsimonious, the idea of werewolves among the Latvians might have come proximately from the Estonians, but ultimately from the Indo-European substrate!
In sum, I think in the details Ginzburg is likely incorrect, but broadly I do think there is something to the idea that a skein of Indo-European folklore did persist submerged under the Christian beliefs of Europe at the time. Lincoln’s modernist assertions are fashionable, and likely most of the readers of The London Review of Books will assume he is closer to the mark, but they have the unfortunate characteristic of almost certainly being totally wrong.