European Pricing System for Water Services as an Instrument for Shaping the Principle of Cost Recovery and the Polluter Pays Principle

The entry into force of Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy has introduced a new pricing system for water services. The Directive identifies the polluter-pays principle and the principle of cost recovery as a basis for action to be taken by the Member States when setting up pricing systems for water services. The provisions of Article 2(38) and Article 9 of the Directive raised questions of interpretation. The research issue of this study is to determine the discretionary scope of the Member States of the European Union for the protection of waters under a pricing system for water services, and to interpret the concept of “services” used in the Directive in the context of the cost recovery principle and the polluter-pays principle. The author, on the basis of the adopted research method, i.e., interpretation of law, views of legal academics and commentators, case-law of the Court of Justice of the European Union, states that the Directive provides for a mechanism whereby each EU Member State determines the individual uses of water in a pricing system for water services on the basis of a country-specific definition of “water services”. The pricing system for water services is only one of the legal instruments for setting the principle of cost recovery and the polluter-pays principle in the Member States’ water management system, and its scope is based on geographical, economic and natural criteria.