Cost recovery for water services in the EU

The EU Water Framework Directive stipulates the principle of cost recovery, including environmental and resource costs, for European water services. Yet a definition of member states’ precise obligations is highly controversial. This particularly holds true for the question whether the request for cost recovery can be restricted to water supply and wastewater disposal only, as many member states argue. The European Court of Justice has now decided on the Commission’s infringement proceedings against Germany regarding the scope of the term “water services”. In its eagerly awaited substantive decision, the Court dismissed the Commission’s action as unfounded but left the door open for further claims. However, many legal arguments in favour of a strict interpretation of cost recovery are not only misleading but also pass up valuable opportunities to deal with scarce water resources in an efficient way.