Italy braced for record 45°C heat wave, EU banks add climate stress tests

Meteorologists project an unprecedented heat wave to hit Italy in mid‑July, with temperatures potentially reaching 45 °C in regions such as Sardinia, Sicily, Apulia and Basilicata. The hot air mass is driven by a high‑pressure system over North Africa that transports Saharan heat into the central Mediterranean, raising temperatures across inland and mountainous areas. Forecasts from the European Centre for Medium‑Range Weather Forecasts (ECMWF) indicate the hottest period between July 15‑19, with possible heat‑driven thunderstorms over the Alps and the Po basin.

At the same time, the European Banking Authority (EBA) is preparing a new stress‑test methodology for 2027 that will explicitly incorporate climate‑related hazards, including extreme heat events. The test will assess banks' ability to absorb losses from climate‑induced credit defaults, declining property values and higher insurance costs. By treating heat waves as a specific risk factor, regulators aim to strengthen financial resilience and prevent a cascade of defaults similar to the 2008 crisis.

Both developments highlight the growing intersection of climate extremes and economic stability across Europe.