European summer conditions may potentially result in financial losses totaling €126 billion.
In the sweltering summer of 2025, Europe experienced a series of heatwaves, droughts, and floods that caused significant economic damages. A comprehensive study, combining current weather and climate data with historical data on weather and its impact on economic development, has revealed the extent of these costs.
The study, which analysed the EU-wide impacts of these extreme weather events between June and August 2025, found that 31 regions suffered short-term damages of 6.8 billion euros and total long-term costs of over 30 billion euros.
Southern European countries were particularly affected, with losses of up to 35 billion euros in the three summer months examined. In absolute terms, the largest economic losses were borne by Spain, France, and Italy.
The study took into account both immediate and long-term economic damages from extreme weather, considering factors such as destroyed buildings, crop losses, reduced productivity, loss of labor, and business closures. Germany was among the less severely affected countries, with around 2.5 billion euros in losses.
Heatwaves, defined as several days with June to August temperatures at least two degrees above the long-term average, and extreme deviations from normal rainfall values used to determine drought and dryness, were major contributors to the economic damages. France, Spain, Italy, and Bulgaria were mainly affected by heatwaves.
Floods due to extreme rainfall caused significant strain, with direct damages estimated at 6.5 billion euros and total costs up to 2029 exceeding 20 billion euros. The total estimated economic damages caused by wildfires in Europe in the summer of 2025 amounted to approximately 43 billion euros, with Southern European countries such as Spain, Italy, Portugal, Greece, and Southern France being particularly affected.
However, the actual damages could be significantly higher than the calculated estimates. The study did not include the impacts of wildfires due to a lack of real-time data, and only included the impacts of drought in their combinations of drought and heatwave due to a lack of data.
The potential follow-up burdens of the respective extreme weather events up to the year 2029 are estimated at around 126 billion euros. Losses from drought in the south of the EU amounted to nearly 29 billion euros in the short term, and including follow-up costs, the losses caused in the three summer months could amount to nearly 75 billion euros by 2029.
In percentage terms, Greece, Cyprus, Malta, and Bulgaria suffered the most significant losses, each exceeding one percent of their 2024 gross domestic product. The study combined 1,160 European regions and included over 32,000 surveys from various climatological and econometric databases in its analysis.
As the frequency and intensity of extreme weather events continue to increase, it is crucial for policymakers and businesses to take these findings into account and develop strategies to mitigate the economic impacts of such events in the future.
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