Once upon a time, inequality in Europe was largely horizontal. The rich western half drove BMWs and holidayed abroad, while the poorer east rewired its own appliances and queued for bread. But three decades of catch-up growth in erstwhile communist countries has put paid to jokes about Romanian cars whose top speed was “downhill”. These days inequality in Europe has a vertical dimension—one that goes up and down family trees. Youngsters unable to move out of their parents’ spare room due to sky-high house prices wonder if they will ever enjoy the lifestyle as adults which they knew as kids. Thirty-somethings in jobs pay hefty taxes to fund the pensions of oldies who retired in their prime. Costs related to ageing are guzzling a quarter of the European Union’s GDP, a figure unlikely to fall as the Old Continent grows older still. To be a young European is to feel oneself an unwitting participant in an intergenerational confidence trick.

If the European welfare state looks like a pyramid scheme, its pharaohs are the “baby-boomers”. The bumper generation born in the two decades after 1945, aged roughly between 60 and 80 (Hello Mum! Hi Dad!), would like to go down in history as the first in centuries not to have started a war pitting one bit of the continent against another. Sociologists will surely celebrate the 1960s, when boomers sought to replace chauvinism with rock ’n’ roll. But economists will judge them less kindly. Boomers granted themselves generous pensions, relying on demographic trends that have since lapsed. The costs turned Europe lethargic. Today’s grandparents inherited a continent rebuilding itself after war; they will pass on one in need of repair after the damage they helped wreak.

The most obvious goodies in the intergenerational heist are houses, which boomers bought for a song and which are now worth millions. Yes, they did so by borrowing money at eye-watering interest rates—but they then profited when property prices kept climbing after the mortgages had been repaid. Even adjusted for inflation, housing in Europe has gone up by a quarter in just a decade, with rents also increasing faster than incomes. The result, beyond making boomers feel like financial whizzes when they were merely lucky, is to lock the young out of home ownership. The share of Europeans who live in their parents’ homes well into middle age (not entirely voluntarily, one assumes, no matter the quality of mama’s cooking) has steadily increased over time. Among those born in the 1980s nearly a quarter still lived at home at 30, half again as many as those born two decades earlier. Home ownership used to be the path to financial independence. Now inheritance looks a better bet—if it ever arrives.

Europe is hardly the only place with old people in pricey homes. But its cradle-to-grave welfare state has pushed more of the cost of ageing onto the young. In most other rich places, including America, Japan and South Korea, over-65s derive most of their income from working a bit and drawing on private pensions they funded during their careers. Europeans quit their jobs early, live long and expect the state—ie, current taxpayers—to pick up the tab for their retirement plans. In America the trillions of dollars stashed away in private pensions provided the cash for venture-capital and private-equity funds, which in turn allowed American firms to grow into behemoths. In most European countries today’s pensions are paid by today’s workers, in the expectation that tomorrow’s as-yet-unborn workers will pick up the baton and fund their own parents as they age. (Some of it is financed by government deficits, which the yet-to-be-born will also have to repay one day.) That means less capital for European firms, one reason why there are so few big ones in areas like tech. Instead there is a huge unmet cost that weighs down the public purse.

None of this mattered when both the economy and the population were growing, as post-war babies remember from their youths. But Europe’s population is now peaking—not least thanks to boomers starting the trend of having fewer kids. In 1960 over five workers supported each pensioner in western Europe. Now there are just 2.5 workers supporting each pensioner. The upshot is that today’s young know they must at least in part make their own pension arrangements, as Americans do, on top of shelling out for payouts to their parents. The only other readily available option to improve the ratio of workers to pensioners is to import lots of migrants. But efforts to do so have helped poison European politics by boosting nasty parties on the populist right. No continent for young men

Nobody will begrudge boomers their elongated lifespans. (Again: an awkward hello to your columnist’s parents here.) But an older society is one that caters to the immediate present, not the future. The median age of voters in France’s most recent presidential elections was 52, not least because the old are more likely than the young to shuffle to the polls. That is within a decade of the effective retirement age. Unsurprisingly, politicians have made old people’s priorities their own. When budgets are tight, money can always be found to protect pensions and old-age homes; it is far easier to push through cuts to education and innovation instead. “The future of democracy is increasingly decided by voters who don’t have one,” laments Maxime Sbaihi, an economist at Club Landoy, a demography think-tank in France.

Things might have changed after covid-19, when the young endured years of social restrictions largely to protect the old. Alas, the favour has yet to be repaid (though these days there is a European Commissioner for “intergenerational fairness”). Raymond Aron, a French thinker, once warned that an ageing society is one that will “be stalked by the spirit of abdication”. That weary mood feels all too real for today’s Europeans, as they trudge past yet another nursery being converted into a nursing home.