Many parts of Europe are using water faster than nature can replace it leading to drought and declining water quality.
These are the key findings of a report published by the European Environment Agency looking at over-use of water across the continent.
The report says that Europeans are using too much water and the short-term solution of extracting ever-greater quantities from limited supplies is environmentally damaging.
"We are living beyond our means when it comes to water," said Prof Jacqueline McGlade, executive director of the EEA.
"The short-term solution to water scarcity has been to extract ever greater amounts of water from our surface and groundwater assets.
"Overexploitation is not sustainable. It has a heavy impact on the quality and quantity of the remaining water as well as the ecosystems which depend on it.
"We have to cut demand, minimise the amount of water that we are extracting and increase the efficiency of its use."
The report argues for a shift of focus in the way we manage water, away from trying to secure a greater supply towards reducing demand in the first place.
In Europe as a whole, 44 % of abstraction is used for energy production, 24 % for agriculture, 21 % for public water supply and 11 % for industry.
These general figures mask significant differences in water use across the continent, however, with agriculture accounting for 60 % of the total water use in southern Europe, a figure rising to 80% in some areas.
The report calls for a price to be put on water so that all sectors must pay for what they use, rather than existing systems where commercial water users often pay a fixed price for an abstraction licence then take according to their needs.
It also argues that governments should implement drought management plans more extensively and focus on risk management rather than dealing with crises as they occur.
In the case of agriculture, it advises that water-intensive bioenergy crops should be avoided in areas of water scarcity and says a combination of crop selection and better irrigation methods can substantially improve agricultural water efficiency if backed-up with official advice for farmers.
It also says there is a need to raise public awareness, such as eco-labelling, eco-certification and education programmes in schools.
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