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For several decades now, a large part of funding available for water resource management is being invested to improve water quality via investments in sewers and wastewater treatment. In a recent study, the OECD estimated that all EU countries together spend on average EUR 100 billion per year on water supply and sanitation (OECD, 2020). This needs to increase to meet compliance with the Urban Waste Water Treatment Directive and the Drinking Water Directive. Total cumulative additional expenditures by 2030 for water supply and sanitation amount to EUR 289 billion for the EU Member States including UK. The main sources of finance for water supply and sanitation expenditures in the EU are revenues from water tariffs, taxes, and EU funds. Some countries rely heavily on EU funding, which is bound to decrease over time and these countries will need to find new financing sources. When assessing Member States capacity to finance the water sector, for some it will be difficult to increase levels of public budgets allocated to water supply and sanitation. While affordability constraints are mentioned to justify tariffs below cost recovery levels, data shows that in most EU Member States, more than 95 % of the population could pay more without facing an affordability issue (OECD, 2020).

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