The gap between the richest countries in Europe and the poorest spread even wider during 2013 leading to fears that inequality is spreading across the Continent.

The wealth gap between the richest countries in Europe and the poorest has spread even wider during 2013, leading to fears that inequality across the continent is growing. In overall terms, according to a report by Julius Baer, wealth in Europe has now exceeded its pre-crisis level of €54.5 trillion ($68.7 trillion) in 2007  – up 1.7 per cent year-on-year at €56 trillion.

The rise in wealth hasn't been universally shared. While the likes of Switzerland and Germany have added over €1 trillion and €2 trillion in net wealth since their pre-crisis peaks, Greece and Spain have gone backwards. In Spain net wealth fell 28 per cent, knocking off €1.4 trillion in private wealth, and in Greece it crashed 23 per cent, falling by €169 billion.

In its inaugural study of European wealth trends, the Swiss bank also found that over two-thirds of Europe's wealth lies in Germany, the UK, France and Italy, with all four of them contributing 4.2 millionaires compared with just 49,000 millionaires in total from Slovenia, Cyprus, Slovakia and Finland.

Other eye-catching statistics include how much wealth the rich own in any one particular country. For instance, in Austria the richest 10 per cent own 62 per cent of the economy's wealth while its top 1 per cent own 40 per cent.

Julius Baer acknowledges that this is a major problem and states that the situation is only likely to get more pronounced in the coming years.

“Our analysts expect little less than 1 per cent growth in 2014 and 1.3 per cent growth in 2015. At the same time, if one assumes the rate of capital returns to remain close to its 200-year average of 4 to 5 per cent per year, it stands to reason that the concentration of European wealth is likely to increase persistently in the years to come,” the reports says.“In other words, the wealthy are likely to get an even larger slice of a gradually expanding wealth cake,” it adds.

A recent concern, aired by the French academic Thomas Piketty in his controversial book Capital in the 21st Century, is how returns on assets typically outpace the general growth rate in an economy, which he claimed will create so much inequality as to provoke a political and social explosion. (Several commentators have argued that his thesis is badly flawed: people typically save to invest and eventually consume from that investment; also, that diminishing returns on investments and other factors mean it is unlikely that investment returns will beat GDP growth over the very long term. To see an article on the issue, click here.)

But clearly this sort of analysis, whatever its shortcomings, has stirred debate. In France, for example, annual inheritance flows make up no less than 15 per cent of national income – a level not seen since the early 20th century. And France has seen the imposition of high top income tax rates and wealth taxes, prompting many from that country to emigrate.

Such issues create a problem for wealth managers looking after Europe's richest families as well as society as a whole, Julius Baer said.

It has been often noted in the wealth industry that families often have a poor record of successfully transferring most of their wealth to the next generation - the "shirtsleeves to shirtsleeves in three generations" issue.

“A large inheritance among heirs can also have a negative effect on personal motivation,” the report states.

“This phenomenon is known as the Buddenbrooks effect …. tracing the gradual decline of a mercantile family over three generations," the report said, referring to the title of a novel by Thomas Mann.