September 16th, 2025 - Europe Faces Billions in Costs from Extreme Summer Weather

Europe is now facing the economic aftermath of a summer marked by extreme weather. Record-breaking heat, droughts, and floods could cost the region at least 43 billion euros, or roughly $50 billion, according to a new study. The report, presented to European Union lawmakers on Monday, aims to help the bloc prepare for a future in one of the fastest-warming regions on Earth.

The study, led by Sehrish Usman of the University of Mannheim alongside two economists from the European Central Bank, notes that the true costs of extreme weather often appear gradually. “These events affect lives and livelihoods through a wide range of channels that extend beyond the initial impact,” Usman said. The researchers sought to capture these extended economic effects.

Using weather data and historical impacts across 1,160 EU regions, the team built a model to project the potential effects of extreme weather in near real-time. However, they caution that the estimates carry considerable uncertainty. The analysis was limited to summer months and specific events, excluding factors like wildfires or overlapping droughts and heat waves.

Southern Europe bore the brunt of the heat this year. Spain, Italy, Portugal, Greece, and Southern France experienced the most intense temperatures. Spain, in particular, recorded its hottest summer since 1961, with three heat waves pushing temperatures 0.1 degrees Celsius above last year’s record. Meteorologists warn that such conditions are likely to become more frequent in the coming years.

The study explains that heat, droughts, and floods each impact economies differently. Extreme heat reduces productivity, especially in sectors like construction and hospitality. Droughts hit agriculture hardest, while floods damage infrastructure and disrupt supply chains, causing indirect losses. These effects combine to create measurable economic damage.

For example, Italy’s estimated losses for 2025 are €11.9 billion, rising to €34.2 billion by 2029, which could account for up to 1.75 percent of the country’s economic output in 2024. Such figures demonstrate how extreme weather is not just an environmental concern but a growing economic challenge for European governments and businesses.

In response, countries are planning ahead. Spain is investing in temperature-prediction systems, training healthcare workers to handle heat-related illnesses, and boosting energy efficiency to curb greenhouse gas emissions. In Paris, city planners are preparing for temperatures that could approach 50 degrees Celsius, underscoring the urgent need to adapt urban infrastructure to a warming climate.

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