Heat Waves Will Cost Europe Billions of Euros

European countries will have to invest billions of euros in the coming years to mitigate the economic consequences of rising temperatures. This is according to interviews conducted by Bloomberg with economists, who say that heat waves reduce productivity, disrupt industry and cause thousands of deaths.

The European Commission estimates that EU member states will need nearly 70bn euros annually by 2050 to adapt to the effects of climate change.

ING analyst Carsten Brzeski described this year’s heat waves as a warning to European policymakers. According to him, the thermometer has become one of the key indicators that economists must monitor.

Simulations by the insurance company Allianz suggest that Germany could suffer losses of approximately 114bn euros by 2030, and France around 210bn euros. Economist Hazem Krichene admitted that his team had not anticipated such a significant impact from rising temperatures.

According to Allianz, European cities and infrastructure are better adapted to cold weather than to extreme heat waves. These heat waves reduce returns on investment, productivity and economic growth and can create a stagflationary environment.

According to estimates by national authorities, this year’s heat waves in Europe have claimed more than 13,000 lives.

(Bloomberg, bak)