River basins in many Eastern and Southern Mediterranean countries suffer from water scarcity due to rapid demographic and economic development, urbanization, industrialization, tourism, and inefficient agricultural activities, which is often the dominant water user. The Gediz River Basin along the Aegean coast of Turkey demonstrates the entire range of prototypical water management problems and reflects the importance of the institutional and regulatory framework, and the need for direct participation of major actors and stakeholders in the decision making process. The case is studied within the scope of two EU INCO projects: SMART (sustainable management of scarce resources in the coastal zone) and OPTIMA (optimization for sustainable water management), sponsored by EU FP5 and FP6 Programs, respectively. The paper aims to present the results of SMART for the Gediz Basin, where the current situation and possible future changes in domestic, industrial and irrigation water demands and supply are estimated on the basis of prevailing trends. The outputs of OPTIMA, which are basically a continuation of SMART, are not covered herein as the optimization procedure within this project is still in the phase of development.