New research showed that despite poorer EU countries closing the gap with richer ones, inequalities remain unchanged or have grown.
Arup Banerji, head of EU countries at the World Bank, said: “The EU is growing, but Europeans are not growing united.”
Kristalina Georgieva, chief executive of the World Bank, said technological change was delivering more jobs for skilled workers in already thriving urban areas but less-educated people were shut out of the cities.
She said: “If left unattended the risk is right there that people feel disenfranchised, disillusioned and left behind.
“There will be fertile ground for populism, not necessarily for politicians who come up with solutions, but people who come up with the right slogan diagnosing what he problem is.”
Italy became the latest country to enter political gridlock last weekend as voters abandoned mainstream parties in favour of anti-establishment groups.
The report warned economic inequality has been “mounting in many parts of the EU since 1990” and the economic structure was “not working for everyone”.
Poor regions in the eastern Europe, such as Hungary and Poland, still have less than 50 per cent of the EU average GDP per capital even though national economies in the east have prospered.
The report found more than half of Europeans do not trust their government or the EU to solve their economic problems.
The figures show the earnings of the poorest 10 per cent of Europeans fell by seven per cent in recent decades at the same time as the earnings of the EU’s wealthiest 10 per cent grew by 66 per cent.
Ms Georgieva said: “Our diagnosis is the convergence machine of the EU is still working but it’s not working for everyone and there are sign of growing divides.
“Low income Europeans are falling behind in the labour market across much of the EU.
“If this is not addressed, there will be growing inequality with all the consequences of that.”
The report suggests there should be a focus on education system failings the have made it harder for the unemployed.
It warned that the rise of technology was a threat to the EU economy as manual jobs had fallen by more than 15 per cent in the last 15 years.