This paper reviews the current problems and prospects to overcome circular water economy management challenges in European countries. The geopolitical paradigm of water, the water economy, water innovation, water management and regulation in Europe, environmental and safety concerns at water reuse, and technological solutions for water recovery are all covered in this review, which has been prepared in the frame of the COST ACTION (CA, 20133) FULLRECO4US, Working Group (WG) 4. With a Circular Economy approach to water recycling and recovery based on this COST Action, this review paper aims to develop novel, futuristic solutions to overcome the difficulties that the European Union (EU) is currently facing. The detailed review of the current environmental barriers and upcoming difficulties for water reuse in Europe with a Circular Economy vision is another distinctive aspect of this study. It is observed that the biggest challenge in using and recycling water from wastewater treatment plants is dealing with technical, social, political, and economic issues. For instance, geographical differences significantly affect technological problems, and it is effective in terms of social acceptance of the reuse of treated water. Local governmental organizations should support and encourage initiatives to expand water reuse, particularly for agricultural and industrial uses across all of Europe. It should not also be disregarded that the latest hydro politics approach to water management will actively contribute to addressing the issues associated with water scarcity.