Europe is blowing up riverbeds as an extreme drought wreaks havoc on its economy

The drought in Europe is so severe that it is jeopardizing countries' economic growth and forcing them to take extreme measures like blowing up riverbeds.

Gripped by a summer of weather extremes, Romania recently shut down its sole working nuclear reactor cooled by the Danube for the first time, with Bucharest even deploying naval forces to carry out underwater detonations to improve water flow.

Images published Monday showed the Romanian navy blasting rocks in controlled explosions in Izvoarele village as part of a push to divert a higher volume of water toward the cooling systems of the Cernavoda Nuclear Power Plant.

Low water levels on the Danube have also threatened to close Hungary's Paks nuclear plant, which supplies around 40% of the country's electricity, and forced Serbia to cut hydropower generation.

In Germany, the water levels on the Rhine River, a crucial waterway in Europe's economic heartland, have fallen to their lowest levels in nearly 150 years, posing a risk to the German economy and further disrupting supply chains.

The water level at Kaub, a key choke point for vessels transiting to southern Germany and Switzerland, fell to 24 centimeters on Monday and Tuesday, reflecting its lowest level since records began in 1880, with forecasts of even lower levels toward the end of this week, according to official data compiled by ETH Zurich.

That's far below the critical level of 78 centimeters at the Kaub gauge for navigation on the Rhine. Transport is still possible below this threshold, but cargo barges must be less heavily loaded, and freight transport costs and low-water surcharges rise sharply.

"Major rivers like the Rhine and Danube are critical trade corridors and sources of water for industry and energy generation, so when water levels fall, the effects extend far beyond the waterways themselves," Liz Saccoccia, water security lead at the World Resources Institute, told CNBC by email.

"We're already seeing that happen. Nuclear plants in Hungary, Romania and France, along with hydropower facilities in Serbia, have already had to reduce electricity generation because there isn't enough water for cooling or driving turbines, increasing the risk of blackouts and costly electricity imports," Saccoccia said.

"Along the Danube, low water levels have prevented farmers from shipping their crops and stopped cruise ships from reaching ports such as Budapest. These are early examples of how increasingly unreliable water supplies can ripple through the economy, affecting trade, energy security, supply chains and local businesses," she added.

The issue shines a light on a critically important environmental issue: water scarcity.

The issue is especially acute across southern Europe, where around 30% of the population is known to be situated in areas with permanent water stress: when water demand exceeds the available supply.