02/12/25 (Agence Europe) – A quarter of the euro area’s economic activity could be threatened in the event of a 100-year drought, according to a one-off study by the European Central Bank published on Tuesday 2 December. The European economy would be heavily exposed to the degradation of ecosystems – in particular the increasing scarcity of water, the decline in its quality and the weakening of natural protection against flooding. “Nature degradation and biodiversity loss threaten price stability, with growing evidence that ecosystem shocks are raising inflation in the euro area”, the researchers observed. In addition, almost one bank loan in five is exposed to risks linked to water scarcity or quality. The study also highlighted feedback loops. Some bank-financed businesses are degrading the ecosystems on which they depend, increasing future risks for the financial sector. See the study: https://aeur.eu/f/jsi (BD)