The OECD and the Directorate-General for Environment, the European Commission department responsible for EU policy on the environment, joined forces to examine current and future water-related financing challenges faced by EU member states. These include investments needed to comply with EU regulation for water supply, wastewater collection and treatment, and flood protection. As part of the research, new data was produced on current levels of expenditure for water supply, sanitation and flood protection, as well as on projected needs. It supported a comparison across member states and substantiated tailored policy discussions in selected countries and at European level. This report captures the rationale for the research, the main quantitative outcomes and the policy issues and recommendations that derived from this two-year co-operation. Lessons from Europe outlined in this report can inspire similar research and policy discussions in other parts of the world.