Heat Waves Threaten to Wipe Out EU Economic Growth

The bank estimates that labor productivity declines alone will drag down EU GDP by 0.6%, while agricultural output faces a contraction of 3% to 7%. These figures arrive as the European Commission projects a slowdown in overall growth to 1.1%, down from 1.5% in 2025, following energy shocks and rising inflation. Analysts at Triodos point to a cascading effect: higher food costs, strained power generation, and damaged transport infrastructure across road, rail, and inland waterways.

France appears particularly vulnerable. As the EU’s second-largest economy, it faces a potential 1.4% dip in GDP, which could push the national economy into a 0.6% contraction. Low water levels in rivers critical for cooling nuclear reactors have already forced the country to slash energy output. This instability has rippled across central and eastern Europe, driving diesel refining margins to 20-year highs while forcing cuts to both nuclear and hydropower generation.