Climate change: Heatwave costs the German economy billions
Germany is facing its hottest June ever recorded in 2026, with temperatures climbing to dangerous levels and creating serious challenges for both people and businesses. The extreme heat is no longer just an environmental concern—it is rapidly becoming a major economic crisis.
As climate change intensifies, heatwaves reaching up to 40°C are becoming more frequent and lasting longer across Germany. Buildings that were originally designed to retain heat during harsh winters are now turning into uncomfortable heat traps during summer, especially those without proper shading or cooling systems.
Cooling infrastructure remains limited in Germany. While air conditioning is common in countries like the United States, only 6% of German households have it. Around half of office and administrative buildings are equipped with cooling systems, but many workplaces still struggle to maintain safe temperatures during heatwaves.
According to economist Katharina Utermöhl from Allianz, rising temperatures are causing measurable economic damage. She stated that for every degree above 30°C, productivity drops by 3%, while energy costs rise by 1.2%. Workers become slower, concentration declines, mistakes increase, and machinery is more likely to overheat. At the same time, cooling buildings requires more electricity, significantly increasing expenses.
Outdoor workers are among the most vulnerable. People working in construction, agriculture, and delivery services face serious health risks under extreme heat. The German Federal Ministry of Labour reports that sick leave rises by around 3.5% when temperatures exceed 30°C and can reach 6% during prolonged heatwaves, further reducing productivity.
Allianz estimates that Germany could suffer economic losses of around $131 billion (€120 billion) between 2026 and 2030 due to heat-related disruptions. The study also warns that the country’s gross domestic product (GDP) could decline by as much as 3%. Lower profits may discourage investment, potentially weakening Germany’s long-term competitiveness.
Although Germany is heavily affected, other European countries such as France, Italy, and Spain are facing even greater climate-related economic damage. Northern European countries, however, have seen some benefits from milder winters, as reduced heating needs lower energy costs.
The current heatwave is officially the longest June heatwave recorded since weather tracking began in Germany. Hans Henri Kluge, the World Health Organization’s Regional Director for Europe, warned that Europe is warming faster than any other continent. He stated that more than 200,000 people across Europe have died from heat-related causes over the past four years.
Germany’s **Arbeitsstättenverordnung (Workplace Ordinance — workplace safety regulation)** requires employers to assess protective measures once indoor temperatures reach 26°C. At 30°C, actions such as providing drinks or adjusting work schedules become necessary. At 35°C, a workplace is generally considered unsafe.
The opposition **Die Linke (The Left Party)** is pushing for stricter legal protections. The party is demanding mandatory access to drinking water, sun protection, fans, additional breaks, and financial support for outdoor workers through a proposed **Klima-Kurzarbeitergeld (climate short-time work allowance — temporary income support during climate-related work disruption)**.