The heatwave, drought and wildfires of last summer were a warning for Europe’s economy, European Central Bank President Christine Lagarde wrote in a blog post published by the bank. Regions affected by a heatwave recorded economic activity 1.5% lower two years later, while activity was 3% lower four years after a drought.
Lagarde also said energy prices reacted less sharply to the rise in gas prices in 2021–22 partly because many euro area countries had increased their low-carbon electricity generation, particularly from renewable sources.
She highlighted Spain as a leading example of this shift.
Sources: ANSA Economia.