The European Union (EU) could suffer economic losses of approximately 180 billion euros (about 294.8 trillion won) due to this year's record-breaking heatwave. This amount is equivalent to 1% of the EU's gross domestic product (GDP), suggesting that most of this year's economic growth forecast (1.1%) released by the European Commission could be offset by the heatwave.

Netherlands-based Triodos Bank recently analyzed the economic impact of the heatwave in a report across four areas: labor productivity, agricultural production, energy, and transportation and logistics. Of these, reduced labor productivity alone is expected to decrease EU member states' GDP by 0.6%, while agricultural output is estimated to fall by 3 to 7%. Rising food and electricity prices, declining power generation, and disruptions to roads, railways, and inland waterways were also cited as factors compounding the economic damage.

By country, France's GDP could shrink by 1.4% due to the heatwave, raising the possibility that this year's economic growth rate could turn negative at minus 0.6%. Italy, Spain, and Belgium are also expected to take significant economic hits, while Poland is projected to be less affected as it experiences relatively less extreme heat.

German insurer Allianz also assessed that Europe's overall GDP declined by 0.3% due to the heatwave that lasted for two weeks in June. Allianz projected that in regions vulnerable to climate change, such as Spain, France, and Italy, growth rates could fall by 5 to 7% by 2030.

As the heatwave and drought prolong, the Rhine River, a critical logistics artery in Europe, is also facing a serious crisis. The German Inland Waterways Association (BDB) expects water levels at the Kaub gauging station to drop to single digits this week. In such a scenario, there are concerns that navigation across the entire Rhine could be halted or the transport route split in two, triggering a logistics emergency.

If navigation stops at Kaub, a major bottleneck on the Middle Rhine between Koblenz and Mainz, disruptions to the transport of raw materials and products to industrial areas upstream in Germany, such as Ludwigshafen, will be inevitable. BDB President Diethard Steinemann warned that at such water levels, not only cargo transport but also passenger and cruise ship operations would be impossible.

Switzerland, which relies on Rhine waterways for about 10% of its trade, is also in a state of emergency. Swiss broadcaster SRF reported that if the Rhine is cut off, switching to trucks or trains would incur enormous costs, and transporting large machinery and certain chemicals by road would be extremely difficult. In response, major German states (North Rhine-Westphalia, Lower Saxony, Rhineland-Palatinate, and Saarland) relaxed trucking regulations over the weekend to prevent logistics disruptions caused by Rhine navigation issues.

Triodos Bank's Chief Economist Hans Stegeman assessed that the projected 1% GDP loss this year represents a real cost but is not yet a 'disaster.' However, he strongly cautioned that this heatwave could be a preview of what lies ahead if there is no swift and robust response to climate change.