Record-breaking hot summer to cost the EU economy €180 billion
Kyiv • UNN
Record heat in the EU will result in losses of €180 billion, equivalent to 1% of GDP. Labour productivity and agriculture will be hit hardest.
This year's exceptionally hot summer will cost the EU economy €180 billion — approximately 1% of GDP and equal to all the growth the bloc was forecast to post in 2026. Politico reports, writes UNN.
Details
France could lose 1.4 percentage points of growth, enough for its economy to contract by 0.6%, while a loss of 0.8 percentage points would almost entirely wipe out the expected growth of the Dutch economy.
The result is not simply that the hottest countries suffer the greatest losses. Spain and Italy have the greatest physical vulnerability and the largest absolute number of hot days, but decades of adaptation mean that the marginal impact of each individual hot day is comparatively small
The largest negative impact is expected to come from reduced labor productivity, as people struggle to work in extreme heat. According to Triodos's estimate, lost labor productivity alone could reduce EU GDP by approximately 0.6%, while agricultural output could decline by 3–7%.
"At first glance, this may seem insignificant, but it is precisely the amount of economic growth expected in the EU this year," the bank said, estimating total losses at €180 billion.
This week, France and the United Kingdom are preparing for the fifth heatwave of the season: temperatures in southeastern France are approaching 40 degrees Celsius, while up to 36 degrees is forecast in the United Kingdom.
The losses are already extending beyond GDP figures. According to Politico, at least 14,000 excess deaths were recorded in the six European countries worst affected by record heat from mid-June to early July.
The drought has also hit Europe's energy system. Due to low water levels in the Danube, the Paks nuclear power plant in Hungary has had to significantly reduce capacity in recent weeks, while Romania was forced to blast through rock to divert water to its last operating reactor. Vessels on the Rhine and Danube have been forced to operate with only partial loads.
Meanwhile, in Austria, the drought has caused approximately €1 billion in agricultural losses, according to the Austrian Hail Insurance. In some regions, more than 75% less rainfall than usual has fallen since mid-June.
Triodos warned against viewing this summer as an exceptional phenomenon, saying that extreme heat "could become structural" as the planet warms. At the same time, governments can mitigate the consequences through irrigation, insulation, indoor cooling and changes to work schedules, the bank said.
"Every year of adaptation without climate change mitigation is a year borrowed from a future in which the baseline temperature will be higher."