Cyclone Harry: over 2 billion in damage and a risk of a fall in GDP for Sicily, Calabria and Sardinia

In highly seasonal economies, some of the lost value added is not recouped in the following months. This is why, beyond the direct damage estimated by the regions, Cyclone Harry is likely to result in 2026 in a loss of GDP of between 0.8% and over 1% in the most exposed areas: which, to put it simply, amounts to a loss of just under two billion.

‘A credible estimate that highlights the urgent need to take action to prevent the consequences of the event from resulting in significant losses in terms of growth and employment.

“Only a swift recovery can prevent the decline of these regions’ strategic sectors – tourism and the agri-food industry – which have driven economic growth in recent years,” says Luca Bianchi, director of Svimez –. We must move swiftly from emergency management to drawing up a programme of structural interventions, starting with the mobilisation of available resources, drawing in particular on funds from the Sicilian Region’s Development and Cohesion Fund, which has earmarked 1.2 billion for measures relating to ‘climate risks and adaptation’, to be committed by 2029.”

In Sicilia. Tra gli effetti del maltempo anche i crolli nella città di Niscemi. (foto Alberto Lo Bianco/LaPresse)

The GDP estimate is in line with the views of business leaders: ‘The extreme weather events of recent weeks,’ comments Sicindustria’s president, Luigi Rizzolo, ‘are having an economic impact that extends well beyond the areas directly affected.

We have launched a detailed monitoring programme for our member companies, but it is already clear that the impact is not limited to businesses located in the most exposed areas. For this reason, we believe it is essential that the scope of the support measures is not limited to narrow geographical criteria.”

Of course, the sector hardest hit remains tourism. ‘The entire coastline from Catania to beyond Taormina has been devastated. In some areas, the sea has eroded seven to eight metres of the coastline, sweeping away everything in its path. The most serious damage has been to the beaches, but Harry has also caused severe damage to the most exposed hotels: in the Catania area, many beach facilities are built on the rocks and have been literally swept away,” says Ornella Laneri, director of the company that owns the Four Points by Sheraton hotel in Acicastello and chair of the tourism section of Confindustria Catania. ‘Now a second problem is emerging, perhaps even more complex: that of reconstruction permits.’ Even though we are talking about removable structures, design modifications, technical and safety checks are required, which demand time and human resources – and, with the season approaching, there is simply no time. Added to this is a practical but crucial issue: the materials needed for reconstruction – starting with the pipes required for the platforms – are becoming increasingly difficult to source.

There are quite a few unresolved issues.

The cyclone also starkly highlighted the limitations of compulsory natural disaster insurance policies: those businesses that had complied with the statutory insurance requirement (not all of them had taken out a policy) found themselves effectively unprotected because the mandatory cover only applies to floods, landslides and earthquakes, whilst the most serious damage was caused by storm surges, an event excluded unless covered by costly policy extensions; the result is that businesses, tourist facilities and manufacturing operations have been left without compensation, suffering substantial losses including those due to business interruption, inevitably bringing the reliance on public funds – which the insurance system was supposed to reduce – back into the spotlight.

And then there is the application of the Bolkestein Directive in the areas hit by Cyclone Harry, for example, which risks causing a short circuit: whilst the deadline to launch tenders for beach concessions by 2027 approaches, current operators – already hit by severe damage and lacking resources – have no incentive to invest in rebuilding beach facilities that are, in any case, destined to be put out to tender, with the result that recovery is stalled, the coastline is left deserted, and the way is paved for legal disputes and compromised tourist seasons.