This heat is expensive. Across the EU, last summer’s extreme temperatures cost an estimated €43 billion in direct, measurable damage: lost crops, infrastructure repairs, and lower tourism revenue.

In the long term, research suggests that Europe's heatwave-related economic losses could be nearly five times higher by 2060 than they were between 1981-2010 if nothing changes.

The heatwave hitting Europe this month will be no exception: the central Portuguese town of Mora set a record for the hottest day in May at 40.3C, while the UK saw its hottest day in May at 35C.

The culprit is a “heat dome”, in which the atmosphere traps hot air from Morocco as if under a lid, preventing the renewal of air. As the air is pushed down, it compresses and warms even further.

That heat is deadly: more than 62,000 people died from heat-related causes in Europe during the planet’s hottest year on record in 2024. It claimed roughly three times more lives than car crashes, and rising heat now kills one person per minute globally.

For the lucky ones who were running their air conditioning in Germany throughout last year’s heatwave, the electricity bill nearly tripled due to increased power demand and thermal power plant outages.

If heatwaves like the current one keep recurring, an analysis by insurance company Allianz Trade shows, Germany alone could lose up to €112 billion by 2030. For every degree above 30C, worker productivity drops by around 3% and energy costs rise by roughly 1.2%.

Multiply that across an entire economy, with construction work, outdoor sectors, and factory output slowing down, and the losses compound quickly. According to the Allianz report, the economic cost of heat erodes public finances, with German tax revenues falling by around 0.7% annually.

The picture is worse further south. While Germany faces a GDP hit of around 0.1 percentage points per bad heat year, Spain is looking at 1.4 points. That gap reflects both climate geography and how much each economy depends on outdoor labour.

In 2025, Cyprus, Greece, Malta, and Bulgaria paid the highest price as a result of the heat, followed by other Mediterranean countries including Spain, Portugal, and Italy.

It’s not looking like it will cool down anytime soon. A record-breaking hot year is almost certain by 2030 as the climate crisis intensifies, the UN’s World Meteorological Organization has warned.