Allianz SE has warned that Europe could see a loss of as much as €800 billion in economic output by 2030 if extreme heat events continue to intensify. The insurance group’s modelling, which covered more than 40 countries using cost data from heatwaves between 2014 and 2024, identified France, Italy, Germany and Spain as the economies most exposed to that loss.

Projected losses for the biggest economies

The analysis puts the at‑risk output for France at €211 billion, roughly $240 billion, if protective actions are not taken. Italy faces a potential loss of €147 billion, Germany €131 billion and Spain €120 billion by the end of the decade. These four economies are also described as bearing the highest fiscal strain and having limited capacity to absorb such shocks.

Heat’s hidden impact on productivity

According to Allianz’s model, heat rarely causes visible damage to infrastructure but reduces productivity when temperatures exceed 30 °C for outdoor workers. Agriculture and construction were highlighted as the sectors most exposed to heat‑related productivity loss. In Germany, where construction contributes a sizable share of gross domestic product, heat‑related delays could raise housing costs.

In the agricultural sector, an Italian agro‑climatologist warned that a single very hot day during the flowering stage can destroy an entire olive harvest. A separate study predicted that olive‑oil yields in the Iberian Peninsula could fall by up to 28 percent, a significant figure given that Spain supplies more than half of the world’s olive oil.

Health services under pressure

Temperatures above 40 °C were recorded across large parts of France and Spain during the recent summer. Health services in those countries reported being overwhelmed and excess deaths increased. The head of the World Health Organization described heat stress as a silent killer, underscoring the growing public‑health threat.

Policy responses and industry reaction

Trade unions in France and Germany have called for a legally binding maximum working temperature, while employers warn that sudden regulatory changes could raise labour costs and hurt competitiveness, especially for small and medium‑sized firms. The European Commission’s recent climate‑adaptation roadmap mentions the need for heat‑resilient infrastructure and stronger occupational health standards, though critics argue that the proposals lack sufficient funding and enforcement mechanisms.

The European Environment Agency noted that cross‑country comparisons depend heavily on methodology and it would not officially label any country as the most affected. Nevertheless, the agency’s climate‑adaptation specialist highlighted the major risk that excessive heat poses to health and the economy, with significant macro‑economic and fiscal consequences.

Financial markets and future costs

Allianz’s analysis observed a surge in demand for climate‑linked insurance products. Green‑bond issuers see opportunities to fund heat‑mitigation projects such as reflective roofing, urban greening and water‑storage systems. Households could face higher food prices, tighter housing markets and possibly lower wages if firms pass on productivity losses.

EU‑wide climate‑related losses have risen sharply since the 1980s, reaching about €50 billion in 2021‑2022 according to CATDAT and RiskLayer GmbH. The new figures suggest that without decisive adaptation measures, the economic and social toll of heatwaves will continue to grow across Europe.