The 2026 wildfire season has inflicted an estimated €3.1 billion in economic damage on Europe in its first two months, according to calculations by the Financial Times based on European Commission data and restoration costs. The figure, covering France, Spain, Portugal, Greece and Romania, already exceeds the Commission’s average annual estimate of €2.5 billion for the whole EU. Nearly half a million hectares of land have been consumed by flames across the five countries.

The fires have been fuelled by a record-breaking heatwave. The EU’s Copernicus climate service recorded June 2026 as the hottest in Western Europe’s history, with an average temperature of 20.74°C, 3.06°C above the norm. The extreme heat has also been deadly: the Euromomo mortality monitoring network reported 10,650 excess deaths linked to the high temperatures by mid-July. Simultaneously, a severe drought is pushing water levels in the Rhine and Danube to historic lows, threatening to halt the Paks nuclear plant in Hungary, which supplies nearly half the country’s electricity, and disrupting production at German chemical giants BASF and Covestro. Romania has already been forced to shut down one reactor at its Cernavodă plant.

France and Spain have borne the brunt of the destruction. The French interior ministry has declared 2026 the worst year on record for forest fires in the country, with industrial representatives reporting at least 40,000 businesses directly affected. In Spain, the government described July’s blazes as the largest in the nation’s history; fires advanced to within 50 kilometres of Madrid, destroying homes and commercial properties. Hundreds of thousands of residents were evacuated across both countries, and the disruption to tourism—a sector on which Spain is heavily dependent—is expected to amplify the economic toll.

The full cost is likely to climb. The FT’s estimate covers only restoration expenses and does not yet account for indirect losses such as property damage, supply-chain disruptions, or long-term impacts on insurance premiums and visitor numbers. The previous high for wildfire-related damage in the past decade was recorded in 2021, when costs also exceeded €3 billion. With the drought’s effects on energy and industry still unfolding, the final bill for the 2026 season remains uncertain.