ECB Warns of Growing Economic Risks from Climate Crisis

The European Central Bank (ECB) is taking steps to assess the growing risks of climate change and natural disasters on the global economy. According to Frank Elderson, a member of the ECB's Executive Board, the climate crisis poses significant economic and financial consequences.

Elderson noted that the degradation of natural ecosystems can affect credit risks, economic growth rates, and inflation in the long term, undermining financial stability. The ECB is preparing a study to show how the deterioration of ecosystems could translate into credit losses for eurozone banks, which is expected to be released by the end of the year.

The study comes as Europe faces a severe drought, with water levels in major rivers such as the Danube and Rhine reaching record lows. This has forced companies to cut back on production and raised concerns about food security. Elderson emphasized that addressing climate change is not just an environmental issue but also a matter of fundamental economics and financial stability.