Scorching summer temperatures may set Europe back by a hefty €126 billion
In the summer of 2025, Europe experienced a series of extreme weather events, including heatwaves, droughts, and floods, which had a significant impact on the continent's economy. A recent study sheds light on the potential costs of these events, offering insights into the economic burdens that EU countries may face in the coming years.
The study, which considered 1,160 European regions and included over 32,000 surveys from various climatological and econometric databases, found that the combined effects of heatwaves, droughts, and floods during June, July, and August 2025 could lead to potential follow-up burdens of around 126 billion euros until 2029.
The study, however, did not account for the substantial damages caused by wildfires this summer, as data on the economic impacts of wildfires was not available. In the summer of 2026, southern European countries, especially Spain and Portugal, were particularly affected by severe wildfires driven by intense heatwaves and dry vegetation conditions. The economic losses for Southern European countries like Spain, Italy, and France due to extreme weather including wildfires are projected to be between 34 and 35 billion euros by 2029.
Short-term losses due to drought in the south of the EU amounted to almost 29 billion euros, with the largest economic losses borne by Spain, France, and Italy. In absolute terms, the losses caused by drought in the three summer months could amount to almost 75 billion euros by 2029, including follow-up costs.
Flooding due to extreme rainfall caused particularly significant strain, with total direct flood damages across the EU estimated at 6.5 billion euros and total costs by 2029 exceeding 20 billion euros. France, Spain, Italy, and Bulgaria were mainly affected by heatwaves. In percentage terms, Greece, Cyprus, Malta, and Bulgaria suffered the most significant losses, each exceeding one percent of their 2024 gross domestic product.
Heatwaves were defined as several days with June to August temperatures at least two degrees above the long-term average. The study records 31 regional heatwaves, 130 areas with exceptional drought, and 65 regions affected by both heatwaves and extreme drought this summer. The researchers only included the effects of drought in their combinations of drought and heatwave due to a lack of data.
The costs of the extreme weather that may occur next year are not included in the calculation. It's a reminder that the economic impact of weather events can be far-reaching and long-lasting, and it's crucial to continue monitoring and mitigating the effects of extreme weather events on our economy.
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