{"id":857226,"date":"2026-08-16T11:20:11","date_gmt":"2026-08-16T11:20:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/857226\/"},"modified":"2026-08-16T11:20:11","modified_gmt":"2026-08-16T11:20:11","slug":"from-tourism-to-power-generation-and-productivity-europe-feels-economic-cost-of-heatwaves-economics","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/857226\/","title":{"rendered":"From tourism to power generation and productivity, Europe feels economic cost of heatwaves | Economics"},"content":{"rendered":"

Across Europe<\/a> this scorching summer, workers have struggled in the heat as wildfires raged and critical infrastructure was shut down.<\/p>\n

Here we look at the impact of the heatwaves on several major economies across mainland Europe \u2013 with the help of analysis from economists at the Dutch bank Triodos<\/a>, who estimate a total of \u20ac180bn could be wiped off EU GDP by the heatwaves. In the UK, the green thinktank Verdant said this week that the heat had already cost the economy \u00a34.4bn<\/a> by the end of July.<\/p>\n

Research shows productivity tends to decline once temperatures breach 30C. Analysts at Triodos assessed the hit to each country on the basis of factors including how many unusually hot days it has suffered, giving a broad-brush estimate \u2013 but each economy also faces its own particular struggles.<\/p>\n

France<\/p>\n

As well as widespread wildfires, one of the big challenges for the French economy has come via lost energy output, with knock-on effects for businesses through higher prices.<\/p>\n

More than two-thirds of France\u2019s electricity generation comes from nuclear. When river temperatures around these nuclear plants get too high, the facilities can no longer discharge heat into them \u2013 and have no choice but to shut down<\/a>.<\/p>\n

Low river levels and rising water temperatures have put pressure on nuclear power production in France, including EDF\u2019s Saint-Laurent nuclear power plant in central France. Photograph: Patrick Siccoli\/SIPA\/Shutterstock<\/p>\n

On Friday, with temperatures soaring once again, up to 15% of the country\u2019s nuclear estate was expected to be offline.<\/p>\n

Economists at Triodos believe France<\/a> could be one of the worst hit European economies, with 1.4 percentage points knocked off GDP \u2013 pushing the economy into reverse.<\/p>\n

That is only likely to exacerbate the country\u2019s continuing fiscal challenges, with Paris already paying the highest interest rate in 15 years on its borrowing amid political wrangling over tax and spending.<\/p>\n

Germany<\/p>\n

Low water levels in the Danube and Rhine rivers have exposed a slew of long-forgotten artefacts from their depths this summer, including the skeletons of Nazi soldiers and an unexploded second world war bomb.<\/p>\n

But the Rhine is also a critical freight route \u2013 and economists at the consultancy Oxford Economics<\/a> reckon this is the greatest threat to the German economy unleashed by the heatwaves.<\/p>\n

The exposed riverbanks of the Rhine in Bingen, Germany. The Rhine is experiencing record-low water levels amid a severe drought. Photograph: Mat\u00edas Basualdo\/EPA<\/p>\n

\u201cThe Rhine carries the bulk of German inland waterway freight, especially coal, crude oil, gas and refined products that sit at the start of the production chain,\u201d they say.<\/p>\n

At its shallowest point, near the town of Kaub, west of Frankfurt, water levels have fallen well below critical levels, forcing barges to lighten their loads, and ship traffic all but halted.<\/p>\n

Wolfgang Grosse Entrup, the head of the German chemical industry association VCI, told Reuters this week that \u201calarm bells are ringing loudly: the extremely low water levels are increasingly pushing logistics and supply chains to their limits.\u201d<\/p>\n

These fresh pressures come as many German industrial sectors are already struggling against cut-price competition from China.<\/p>\n

Nevertheless, judged on the number of hot days it has suffered, as well as other factors including air conditioning penetration, Triodos economists expect the aggregate impact on GDP in Germany<\/a> to be smaller than in France, at less than a percentage point.<\/p>\n

Spain<\/p>\n

Spain has been worst hit by this year\u2019s devastating wildfires, which could affect insurers, with almost 275,000 hectares damaged, according to the EU\u2019s Copernicus monitoring system<\/a>.<\/p>\n

Perhaps surprisingly, Oxford Economics finds that while the human toll is appalling, the economic hit is likely to be relatively minor, with tourism spending redirected elsewhere.<\/p>\n

\u201cCredit card data for the Spanish regions hit by wildfires show no clear disruption in non-resident spending, suggesting tourism was barely affected,\u201d they say.<\/p>\n

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\u201cResident spending did fall in the week of the fires, but this was a direct consequence of people being evacuated, rather than lasting damage, as spending returned almost to trend within days of the national emergency being lifted.\u201d<\/p>\n

Nevertheless, with an estimated 47 excessively hot days expected by the end of the summer, Spanish workers and firms will have experienced a hit. Triodos expects the heat to knock almost 1 percentage point off the 2.8% growth forecast for Spain<\/a> by the European Commission.<\/p>\n

Italy<\/p>\n

With a heavier reliance on tourism and agriculture than many other European economies, Italy<\/a> appears particularly exposed.<\/p>\n

The agricultural association Coldiretti claims climate impacts have already cost producers of commodities including tomatoes, olive oil and wine about \u20ac20bn over the past four years<\/a> \u2013 12.5% of the sector\u2019s output in that time.<\/p>\n

And with more hotel beds than any other EU country, Italy could also suffer if the legacy of repeated heatwaves is to tempt tourists to head for cooler climes.<\/p>\n

Based on the high number of excess hot days, Triodos reckons Italy will be hit second-hardest of the EU countries it studied \u2013 with 1.1 percentage points wiped off GDP.<\/p>\n

Tourists sprayed with cooling mist at the Colosseum in Rome. Photograph: Amer Ghazzal\/Shutterstock<\/p>\n

Over time, the effects could compound the challenges for an economy already struggling with an ageing population and high public debt.<\/p>\n

Separate research by the Italy-based climate group CMCC<\/a> suggested the country\u2019s exposure to heatwaves and drought could eventually drive up the interest rate the government pays to borrow, as investors fret about the impact on the public finances.<\/p>\n

Poland<\/p>\n

Unlike its more westerly neighbours, Poland<\/a> is an outlier in having experienced only a few more hot days in 2026 than in a normal year.<\/p>\n

It has not been completely insulated from the heatwaves: lack of rainfall means its rivers have suffered, with power plants having to be shut off due to the low level of the Vistula, for example. Poland\u2019s electricity grid operator had to invoke emergency powers earlier this month, during what the prime minister, Donald Tusk, called \u201ca very difficult period\u201d<\/a>.<\/p>\n

Transport and energy challenges in harder-hit EU economies have also had knock-on effects in Poland. But the Triodos analysis shows the country recording healthy economic growth of 2.9% this year \u2013 little changed from the European Commission\u2019s spring forecast.<\/p>\n","protected":false},"excerpt":{"rendered":"Across Europe this scorching summer, workers have struggled in the heat as wildfires raged and critical infrastructure was…\n","protected":false},"author":2,"featured_media":857227,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-857226","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/857226","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=857226"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/857226\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/857227"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=857226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=857226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=857226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}