European business, markets and politics
All 27 Italian cities have been placed on red alert as temperatures soar above 40 °C, triggering health warnings, energy cuts and transport disruptions across the continent.

For the first time Italy’s national heat‑surveillance system has placed every one of its 27 monitored cities on red alert, the highest warning level. The move reflects a health risk that now extends to the whole population, not just the traditionally vulnerable, as a sweltering ridge of air pushes temperatures above 40 °C across southern and central Europe.
Extreme temperatures are already rewriting national statistics. Slovakia recorded an all‑time high of 42.2 °C at Dolne Plachtince, while Austria reached 41.2 °C at Bad Deutsch‑Altenburg – both unprecedented readings. In Hungary, Budapest logged its warmest overnight low ever, 28 °C, underscoring the lack of nocturnal relief.
Low water levels on the Danube have forced Slovakia to shut down seven of the eight turbines at the Gabčíkovo hydroelectric plant, trimming output by 15 % compared with the previous year. Further downstream, Hungary’s sole nuclear facility at Paks is operating at roughly 10 % of capacity because the river is both too warm and too shallow to provide adequate cooling.
The Hungarian government has introduced emergency conservation measures. Major industrial users – Mol, Gedeon Richter, Suzuki, Mercedes‑Benz, Audi and BMW – have agreed to curb electricity consumption. Freight trains are barred from running between 17:00 and 22:00, decorative lighting in Budapest has been switched off, and parliamentary sessions have been cancelled for the week.
In Germany, falling Rhine water levels threaten inland waterway traffic that carries chemicals, coal and grain. Transport Minister Steffen Bilger met industry representatives on Thursday and warned that the situation could create serious bottlenecks for the wider logistics chain.
Firefighters in southeastern France continue to monitor a blaze in the Var region that has consumed more than 60 sq km since 20 July, the largest fire in the area for decades. Strong winds and tinder‑dry conditions keep the risk of re‑ignition high.
Further north, a grass fire forced the temporary closure of Heathrow’s southern runway on Thursday, illustrating that even cooler parts of the continent are not immune.
In the Balkans, temperatures approached 40 °C. Serbia is battling several forest fires, and tourists in Dubrovnik are staying away from the beaches during the peak heat.
Rome has responded with a free “urban beach” along the Tiber in the Marconi neighbourhood, extended evening opening hours at the Colosseum and Pantheon, installed misting fans and added medical stations to cope with the heat.
Meteorologists expect the heat dome to linger through the weekend before gradually weakening. Governments are already drafting longer‑term adaptation strategies, ranging from urban greening schemes to revised reservoir management plans.
Analysts at Jefferies warn that El Niño‑driven heatwaves could lift European inflation by a full percentage point next year, as crop yields fall and energy costs rise.
The immediate priority remains clear: keep people cool, maintain electricity supplies and keep supply chains moving while the continent waits for a break in the scorching weather.