Droughts induce a complex web of impacts that span many sectors of the economy, as exemplified by extensive crop failure, reduced power supply, and shipping interruptions in the EU during 2018 and 2019. With global warming droughts will happen more frequent, last longer and become more intense in southern and western parts of Europe, while drought conditions will become less extreme in northern and north-eastern Europe. With 3°C global warming in 2100 drought losses could be 5 times higher compared to today, with the strongest increase in drought losses projected in the Mediterranean and Atlantic regions of Europe. When expressed with respect to the total size of the economy the effects are dampened relatively, because drought-sensitive sectors like agriculture are projected to become relatively less economically prevalent in future EU economies than they are nowadays. The consequences on ecosystems are typically not monetized and hence are not reflected in the loss estimates. PESETA IV estimates current annual losses from drought to be around 9 €billion for the EU and UK, with the highest losses in Spain (1.5 €billion/year), Italy (1.4 €billion/year) and France (1.2 €billion/year). Depending on the region, between 39-60% of the losses relate to agriculture and 22-48% to the energy sector. Public water supply accounts for between 9-20% of the total damage. Losses in the transport sector relate only to inland water transportation and on average represent 1.5% of total losses, while subsidence damage to infrastructures accounts for around 8% of total losses. Drought also affects the environment in many different ways, yet these impacts are difficult to valuate.