YEREVAN, August 19. /ARKA/. Extreme weather and climate events have caused economic damage of approximately €822 billion to European Union countries from 1980 to 2024, according to Reuters citing data from the European Environment Agency.
About a quarter of the total damage occurred in just the last four years, indicating an increase in financial risks associated with climate change.
One of the key issues remains the low level of insurance coverage. According to EU estimates, only about a quarter of losses from climate disasters are insured, and in some countries, this figure is less than 5%.
Experts warn that as extreme weather events become more frequent, the burden on government budgets may increase. This is especially true for countries already facing high levels of budget expenditures and the need to finance defense, social obligations, and other major spending items.
Analysts cite the floods in Spain in 2024 as an example, with recovery costs estimated at about 0.7 percentage points of GDP from 2024 to 2026.
According to Franklin Templeton, in some countries, climate losses may impact government finances by 1–2% of GDP in the future.
The economic analytical center Bruegel previously calculated that after the 2021 floods, Germany had to allocate about €30 billion in public funds to compensate for the bulk of the damage due to low insurance coverage.
