Extreme Weather Events in Summer 2025: Europe Faces Long-Term Losses of 126 Billion Euros
Heat waves, droughts, and floods affected around a quarter of EU regions in the summer of 2025. A new extended study by Dr. Sehrish Usman from the University of Mannheim and economists from the European Central Bank shows: The economic consequences are considerable – with estimated losses of 43 billion euros in 2025 alone and a total of 126 billion euros by 2029.
Extreme weather events not only affect daily life – they also leave deep economic scars. A new study, published in the journal European Economic Review, uses current weather data and historical comparative values to show for the first time how severely individual regions in the European Union are already affected by the consequences of climate change. Usman, a post-doctoral student at the Chair of Corporate Governance at the University of Mannheim, played a key role in the study.
The study is based on weather data for the period from June to August 2025. This data was used to analyze 1160 European regions (“NUTS3”, comparable to administrative districts in Germany). Regions in southern Europe, e.g. in Spain, Italy, Portugal, Greece and southern France, were particularly badly affected. Northern countries such as Denmark, Sweden and Germany suffer less damage, but the frequency and extent of extreme weather events, especially flooding, is increasing in these regions. Smaller economies such as Bulgaria, Malta and Cyprus are particularly vulnerable and suffer large losses in relation to gross value added.
In total, 96 regions experienced heat waves, 195 suffered drought, and 53 were affected by floods. All three types of events impede economic activity in different ways: Heat leads to productivity losses, for example in the construction and hospitality industries, while droughts mainly affect agriculture. Floods cause direct damage to infrastructure and buildings – as well as indirect losses, such as from disrupted supply chains.
These economic losses are clearly measurable: In Italy, for example, the estimated losses were 11.9 billion euros for 2025 and will amount to 34.2 billion euros by 2029. This corresponds to 0.6 or 1.75 percent of Italy's economic output in 2024. In France, the losses amounted to 10.1 billion euros (2025) and are estimated at 33.9 billion euros in 2029.
The study shows that extreme weather events are no longer a distant threat – they are already shaping Europe’s economic development. “Having timely impact estimates helps policymakers target support and adapt strategies while the effects of extreme events are still unfolding,” emphasizes Usman. The researchers call for increased investment in climate adaptation, such as heat protection in cities and improved water management.
Text: Fabio Olsen / April 2026