Europe Braces for Economic Nightmare as Gas Prices Soar and Nuclear Reactors Shut Down
Europe is facing an economic crisis due to extreme temperatures and drought conditions. Natural gas prices have reached 61 euros per megawatt-hour, a level not seen since the war with Iran. The region's nuclear reactors are being shut down due to low water levels in rivers critical for cooling equipment. Romania has declared a state of energy emergency and asked businesses and households to reduce their energy consumption.
The heatwave is expected to cost the European economy around 180 billion euros, or approximately 1% of GDP, according to an estimate by Dutch-based Triodos Bank. The economic impact will be significant due to lower labor productivity, disruptions in agriculture, energy, and transport, as well as pricier food.
The situation is further complicated by the war in the Middle East, which has restricted available natural gas cargoes and driven up demand for air conditioning in Europe. This has boosted gas consumption during a critical period when the region should be filling its storage facilities ahead of winter.