Climate change, old water networks, pricey water services: all push for a refreshed agenda on water at European level. The European Parliament, responding to such calls, has just discussed the future of water management in Europe during its plenary session in Strasbourg.

During the debate, EU Commissioner Virginijus Sinkevičius highlighted the significant economic damage caused by water scarcity in Europe, especially in sectors like agriculture, energy and inland navigation, leading to an estimated yearly loss of €9 billion. As water is a basic right —and water management is a cross-border issue—to fix market failures, the Commission announced that it would propose a new “Water Resilience Initiative” in March 2024. The proposal is aiming to address immediate needs with actions while also engaging stakeholders and developing long-term solutions. The initiative will focus on systemic transformation in water management, while prioritizing the protection of nature and ecosystems.

The Commissioner stressed the need for better implementation of existing water legislation and more advanced planning and accurate data collection for water management purposes. Additionally, the proposal will likely advocate for addressing both quantity and quality issues related to water, including pollution reduction and more efficient water use. Water pricing policies based on the polluter-pays principle will be encouraged. Investment in water-related infrastructure, supported by funding mechanisms like ERDF and RRF, is going to be crucial, so initiatives should be expected in this regard, too. Additional legislative measures, such as the recast Drinking Water Directive and Urban Wastewater Treatment Directive, will promote water reuse and reduce freshwater abstraction.

During the debate, Commissioner Sinkevičius underlined the importance of a comprehensive approach to water management, including nature-based solutions and hybrid green-grey infrastructure. Water resource management and the water distribution network should be managed together to reap the most efficiency gains for all users. As Dentons experts have been advocating for this policy change for many years, we are happy to see the Commission taking this approach.

All political groups have embraced the idea of large-scale investment promotion in water distribution networks and an accurate financial architecture, with incentives and accompanying behavioral penalties, both at the European and national levels. Some political groups in the Parliament also emphasized the importance of keeping a close eye on the prioritizing of drinking water management and agricultural water quality.

Dentons’ Budapest office is currently developing a comprehensive resolution to water resource management, water distribution and wastewater collection networks. Our forthcoming analysis and policy solutions will provide market players and authorities in Hungary with an all-encompassing alternative to financing problems, water management issues and maintenance of water networks.