Overview

• The study, published in European Economic Review and led by Sehrish Usman of the University of Mannheim with ECB co‑authors, quantifies both immediate and longer‑term economic damage.
• A single season of heat, drought and floods cut European production by 0.26% compared with 2024, reflecting knock‑on effects that extend well beyond direct physical losses.
• Spain, France and Italy each face losses above €10 billion this year, with the Mediterranean bearing the heaviest burden and smaller economies such as Cyprus, Greece, Malta and Bulgaria seeing losses above 1% of GDP.
• The model captures direct damages to infrastructure, buildings and crops as well as indirect effects including lost output during reconstruction, mortality impacts and adaptation costs that often escape insurer tallies.
• Researchers caution the totals likely understate the true cost because they exclude cumulative effects and some impacts, including record wildfires, as flood risks rise in central and northern Europe.