A hot summer in Europe could cost the EU economies 180 billion euros this year, which is approximately 1% of GDP and nearly matches the growth the bloc expected in 2026. France will face the largest losses among the major member states.
According to a study published by Triodos Bank, the prolonged heatwave sweeping Europe this summer could effectively wipe out annual economic growth. The bank’s analysis estimates that the damage from extreme heat and wildfires will total 180 billion euros in 2026, which is about 1% of GDP. Against the backdrop of the EU’s expected growth of about 1.1% this year, this will leave the bloc on the verge of stagnation.
Triodos Bank estimates losses in four main areas, three of which are quantitatively assessed as average indicators for the EU. The decline in crop yields and dairy production, as well as the further increase in food prices, account for about 0.15%. Restrictions on nuclear, hydro, and thermal energy production, reduced solar energy efficiency, and rising wholesale electricity prices add from 0.12% to 0.15%. Disruptions in rail, road, and water transport add another 0.15%.
Impact on labor productivity
The largest effect, which is also the hardest to estimate, concerns labor productivity. Productivity per worker decreases when the temperature exceeds approximately 25–30°C, with the sharpest losses observed in outdoor jobs and those requiring significant physical effort. Office work also suffers, partly because heat impairs sleep and cognitive functions. An inter-country analysis by Allianz, cited in the study, estimates losses of about 3% in productivity for each hour of work for every degree above 30°C, if such temperatures persist for several days.
France suffers the greatest losses
The study’s results are not a ranking of the hottest countries. Triodos Bank assesses each economy based on the share of production in heat-vulnerable sectors, the duration of commutes, the prevalence of air conditioners, and the level of acclimatization, and then considers the number of excessively hot days recorded this year. France turned out to be the most affected, losing about 1.4 percentage points of economic growth, enough for its economy to shrink by about 0.6% after an already weak start to the year. The Netherlands lose about 0.8 percentage points, leaving them at roughly zero growth. Spain and Italy have the most vulnerable workforce and the highest number of hot days, but decades of adaptation mitigate the impact of individual heat periods. Poland, with a low prevalence of air conditioners and a low level of acclimatization, would be very vulnerable, but had a cooler summer and is still expected to grow by about 2.9%.
Human losses and wildfires
Human losses largely remain outside these figures. An estimated 20,400 heat-related deaths occurred in France, Germany, Spain, and Italy during the June heatwave alone. If approximately 25,000 deaths this summer are assessed by the number of lost years of life, their economic cost could range from 1.5 billion euros to 7 billion euros. As of last week, wildfires had affected over 490,000 hectares across the EU, while the 20-year average is 197,000 hectares, according to the European Forest Fire Information System. France recorded unprecedented wildfire scales. Lost ecosystem services due to burned areas could add from 100 million euros to 4.6 billion euros.
Adaptation could reduce productivity losses by about 40%, the study suggests, but not eliminate them entirely. Its authors warn that their estimates are based on conservative assumptions. The bank argues that adaptation alone is insufficient and Europe needs more decisive measures to reduce emissions. The study’s authors point to the Commission’s decision on July 17 to weaken the trajectory of the main carbon pricing scheme as a step in the wrong direction.
Source: Euronews
