Extreme summer temperatures may result in a financial loss of approximately €126 billion for Europe.
In the sweltering summer of 2025, Europe experienced a series of extreme weather events, including heatwaves, droughts, and floods. A comprehensive study has revealed the substantial economic impact these events had on various European countries. The analysis, which covers 1,160 European regions and includes over 32,000 surveys from various climatological and econometric databases, estimates the total costs, including direct and indirect consequences, to be around 126 billion euros. Heatwaves were particularly devastating, with Spain, France, and Italy suffering the highest absolute economic losses. Southern European countries, such as Spain, Italy, Portugal, Greece, and southern France, experienced the most severe economic losses, totalling up to 35 billion euros in the three summer months examined. The study defines heatwaves as several days with June to August temperatures at least two degrees above the long-term average. Extreme deviations from normal rainfall values were used to determine droughts and dryness. In total, the study recorded 53 floods, 31 regional heatwaves, 130 areas with exceptional drought, and 65 regions affected by both heatwaves and extreme drought in the EU this summer. Floods caused by extreme rainfall resulted in direct damages of 6.5 billion euros and total costs of over 20 billion euros by 2029. Germany is among the less severely affected countries, with around 2.5 billion euros in losses. Smaller economies such as Bulgaria and Cyprus were also heavily affected. The study also considers long-lasting economic damages, with the mid-term total costs significantly higher than immediate damages and spreading over several years. In terms of percentage of GDP in 2024, Greece, Cyprus, Malta, and Bulgaria experienced the most significant losses due to floods, each exceeding one percent. Sehrisch Usman, a Mannheim economist, stated that these losses are significant for many European economies at the presentation of the analysis. The total losses caused by drought in the south of the EU could amount to nearly 75 billion euros by 2029, although the study only included the effects of drought in their combinations of drought and heatwave due to a lack of data. It's important to note that the study does not factor in the significant damages caused by wildfires this summer due to a lack of real-time data. The researchers consider their calculations conservative, suggesting that the actual damages could be substantially higher. The study uses weather and climate data from 1995 to 2022 as a reference, offering valuable insights into the economic impacts of extreme weather events in Europe and the need for proactive measures to mitigate these losses in the future.
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