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The article contributes to a discussion on two global issues on water: water resources management, and water supply and sanitation. Focusing on Europe, it traces the legal roots of current systems in history: as a resource, water is considered as a common property, rather than a market good; while as a public service it is usually a commodity. Public water supply and sanitation technologies and engineering have developed under three main paradigms: quantitative and civil engineering; qualitative and chemical/sanitary engineering (both on the supply side); and the most recent one, environmental engineering and integrated management (on the demand side). The cost of public drinking water is due to rise sharply in view of the two-fold financial challenge of replacing an ageing infrastructure and keeping up with ever-rising environmental and sanitary quality standards. Who will pay? Government subsidies, or water users? The author suggests that apparent successes with privatisation may have relied heavily on hidden government subsidies and/or the healthy state of previously installed water infrastructure: past government subsidies are still felt for as long as the lifetime of the infrastructure. The article stresses the importance of public participation and decentralized local management of water and sanitation services. Informing and involving users in water management decisions is seen as an integral part of the ‘ethics’ side of the crucial three E's (economics, environment, ethics). The article strongly argues for municipal provision of water services, and hopes that lessons learnt and solutions found in the European experience may serve water services management efforts in other regions of the world. [ABSTRACT FROM AUTHOR]