European Climate Fiscal Shock Workbench

Macroeconomic & Climate Setup

Regional Economy Archetype

Warming & Hazard Pathway

Extreme Disaster Shocks

Riverine Flooding (1.8% GDP)

Wildfire Rebuild (0.9% GDP)

Agrarian Drought (1.2% GDP)

Coastal Storm Surge (1.5% GDP)

Adaptation CapEx (% GDP)1.5%

Tax Revenue Contraction Multiplier0.65x

Supranational Backstop

Enable EU Solidarity Fund & ESM

EU Disaster Risk Absorption30%

10-Year Debt Sustainability Trajectory (% of GDP)

Baseline

Unmitigated Shock

EU Solidarity Mitigated

10-Year Fiscal Projection Ledger

Year	Base Debt	Unmitigated Debt	EU Mitigated Debt	Primary Balance	Spread (bps)

DSA Stress Telemetry (Year 10)

Unmitigated Debt 138.4% Debt-to-GDP at t=10

Mitigated Debt 124.6% With EU risk-sharing

Sovereign Spread +145 bps Risk premium widening

Cumulative Drag €184.2B Total fiscal capex loss

Sustainability Verdict

Requires Enhanced Fiscal Coordination & Climate Adaptation Capitalization

Structural Exposure Breakdown

Initial Sovereign Debt: 115.0% of GDP

Annual Direct Hazard Shock: 2.70% of GDP

Supranational Net Relief: 0.81% / yr

Effective (r - g) Differential: +1.85%

Methodology Note: Standard DSA recursive debt accumulation formula: d_t = d_{t-1} * (1 + r_t)/(1 + g_t) - pb_t + s_t where s_t models direct disaster reconstruction capex and revenue erosion from compounding climate anomalies.