Europe’s crippling summer drought has grown severe enough to threaten economic growth across the continent, pushing governments into extraordinary and unprecedented measures.
Romania recently shut down its sole working nuclear reactor cooled by the Danube River for the first time, a dramatic step that underscores the scale of the crisis.
Bucharest even deployed naval forces to carry out controlled underwater detonations near Izvoarele village, aiming to improve water flow toward the cooling systems of the Cernavoda Nuclear Power Plant.
Low Danube water levels have also threatened to close Hungary’s Paks nuclear plant, which supplies around 40% of the country’s electricity, and forced Serbia to cut hydropower generation.
Germany’s Rhine River has fallen to its lowest levels in nearly 150 years, posing a direct risk to Europe’s largest economy and further disrupting already strained supply chains.
The water level at Kaub, a critical choke point for vessels heading to southern Germany and Switzerland, fell to 24 centimeters this week, its lowest since records began in 1880.
That reading sits far below the critical 78-centimeter threshold at the Kaub gauge, above which normal navigation and fully loaded cargo barges can operate without surcharges.
“Major rivers like the Rhine and Danube are critical trade corridors and sources of water for industry and energy generation, so when water levels fall, the effects extend far beyond the waterways themselves,” said Liz Saccoccia, water security lead at the World Resources Institute.
“We’re already seeing that happen. Nuclear plants in Hungary, Romania and France, along with hydropower facilities in Serbia, have already had to reduce electricity generation because there isn’t enough water for cooling or driving turbines, increasing the risk of blackouts and costly electricity imports,” Saccoccia added.
“Along the Danube, low water levels have prevented farmers from shipping their crops and stopped cruise ships from reaching ports such as Budapest. These are early examples of how increasingly unreliable water supplies can ripple through the economy, affecting trade, energy security, supply chains and local businesses,” she continued.
Stefan Kooths, professor of economics at the Kiel Institute for the World Economy, estimated that low Rhine water levels could dampen German gross domestic product by up to 0.2% in the third quarter.
“The loss in value added can be roughly estimated at 1 to 2 billion euros ($1.15 billion to $2.3 billion) in the third quarter,” Kooths told CNBC, warning that transport capacity would remain constrained well into August.
Felix Schmidt, senior economist at German private bank Berenberg, noted that companies had not been caught entirely off guard, as climate change has made low Rhine levels a recurring challenge.
Businesses have responded by stocking up on inventories or rerouting goods by rail and road, though Schmidt acknowledged that freight rates were currently going “through the roof,” deepening inflationary pressures.
“Given that Germany is growing very little, obviously, if we grow 0.1 instead of 0.2 then this means we lose half of the growth, if you want to frame it like that,” Schmidt told CNBC in a phone interview.
The German economy expanded by only 0.2% in the second quarter compared to the previous three-month period, leaving little buffer against any additional climate-driven economic shocks.
Schmidt described drying rivers as just one expression of Germany’s broader economic struggle within an intensifying climate crisis that is disrupting productivity, infrastructure, and energy supply simultaneously.
“You also have the catastrophic development like the fires sweeping now in southern Europe… So, it’s affecting the economy in many, many ways,” Schmidt said, painting a bleak picture of the continent’s near-term outlook.
The broader water scarcity crisis is particularly acute across southern Europe, where around 30% of the population lives in areas with permanent water stress, where demand consistently exceeds available supply.
