“Europe’s summer of extreme weather caused €43bn of short-term losses, analysis finds”, 15 September 2025
The violent weather that battered Europe this summer caused short-term economic losses of at least €43bn, according to an EU-wide estimate, with costs expected to rise to €126bn by 2029.
The immediate hit to the economy from a single brutal summer of heat, drought and flooding amounted to 0.26% of the EU’s economic output in 2024, according to the rapid analysis, which has not been submitted for peer review but is based on relationships between weather and economic data that were published in an academic study this month.
The greatest damage was done in Cyprus, Greece, Malta and Bulgaria – each of which suffered short-term losses above 1% of their 2024 “gross value added” (GVA), a measure similar to GDP. They were followed by other Mediterranean countries including Spain, Italy and Portugal.
The economists from the University of Mannheim and the European Central Bank described the results as “conservative” because they did not account for the record-breaking wildfires that torched southern Europe last month or the compounding impact of extreme weather events that strike at the same time…
While most research into the economic costs of climate breakdown looks at direct impacts, such as destroyed assets or insured losses, the authors of the new study used historical relationships between violent weather and economic output to account for ripple effects, such the limited hours that builders can work during heatwaves or the disruption to commute times after floods damage railways.
Stéphane Hallegatte, the chief climate economist at the World Bank, who was not involved in the study, said it confirmed that the wider economic impacts of extreme weather were larger than the direct effects and last longer than people imagine… Gert Bijnens, an economist at the National Bank of Belgium, who was not involved in the study, said supply chain disruption was one of the most significant “hidden costs” that usually went uncounted. A study he coauthored on the costs of the devastating Belgian floods in 2021 found that sales at manufacturing firms far from the disaster fell sharply if they had long-standing suppliers in the flood zones…
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