Europe’s increasingly extreme summers are becoming a major economic problem, with more frequent heatwaves driving up costs, disrupting businesses and weighing on growth. Massive wildfires have been raging in France and Spain, burning 300,000 acres and forcing the evacuation of 300,000 people. According to a study by the University of Mannheim and the European Central Bank, heatwaves, droughts and floods in the summer of 2025 caused the European economy to lose 0.3% of output, with damage projected to reach 0.8% by 2029. Insurance companies paid out $56.3 billion in losses for wildfires in the 2010s, six times more than the $8.7 billion in the 2000s. The hardest-hit sectors include energy, real estate, construction, agriculture and transportation.
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