By Abbas Nazil
Europe’s violent summer of heat, drought and flooding has caused short-term economic losses of at least €43bn, according to a rapid analysis by economists from the University of Mannheim and the European Central Bank.
The study projects that damages could climb to €126bn by 2029 as extreme weather becomes more frequent and severe.
The immediate hit from this summer’s events alone was equivalent to 0.26% of the EU’s economic output in 2024.
The greatest impacts were recorded in Cyprus, Greece, Malta and Bulgaria, where short-term losses exceeded 1% of their gross value added.
Other Mediterranean nations including Spain, Italy and Portugal also experienced significant economic strain.
The authors described their results as conservative, noting that they did not factor in the record wildfires that ravaged southern Europe or the compounding effects of simultaneous disasters.
Lead author Sehrish Usman stressed that the estimates provide timely insights for policymakers who need to target support in the absence of official data.
She emphasized that the full costs unfold slowly, affecting livelihoods across multiple channels beyond the immediate destruction.
Climate scientists warn that global heating is worsening the risks, with studies showing that extreme fire weather became 40 times more likely in Spain and Portugal, and ten times more likely in Greece and Turkey.
The June heatwave alone is estimated to have tripled the death toll across twelve major cities due to heat-related pollution impacts.
Experts highlight that indirect costs, such as reduced work hours in heatwaves or transport disruption from floods, can rival or exceed direct damages.
Stéphane Hallegatte, chief climate economist at the World Bank, welcomed the study, saying it confirmed that the broader economic footprint of climate disasters is often underestimated.
However, he warned that imperfect proxies used in the research might still understate the true scale.
Economist Gert Bijnens from the National Bank of Belgium added that hidden costs like supply chain disruptions are often ignored, potentially underestimating damages by up to 30%.
He noted that historical averages cannot fully capture compounding events, but the message is clear: extreme weather is already leaving a lasting economic footprint across Europe.
