Heroin use and drug injecting were declining, the report said, but the number of drugs-related deaths remained high at 7,000-8,000 people in the EU's 27 member states and Norway in 2005, the last year for which data is available.
An increase of more than 30 percent in lethal overdoses was recorded in Greece, Austria, Portugal and Finland, the report said.
"Over 7,000 lives lost a year is a compelling indication that we are not getting it right when it comes to overdose prevention in Europe," said Wolfgang Goetz, director of the Lisbon-based European Monitoring Center for Drugs and Drug Addiction.
An estimated 4.5 million Europeans were reported to have used cocaine last year - an increase of 1 million from the previous year. Some 107 tons of cocaine were seized in 2005, a 45-percent increase on 2004. Most of the drug was smuggled into Europe through Spain and Portugal.
But young Europeans still have lower experience with cocaine than young Americans and Canadians, the survey found.
Nearly a quarter of all adults in the EU - around 70 million - said they have tried cannabis at some point in their lives, while 23 million used it last year, the report said. The highest consumption of cannabis among people under 34 was reported by Spain, the Czech Republic, France and Italy.
The survey also found 7-18 percent of school kids aged 13 smoked tobacco daily in the EU countries, while up to 36 percent of students said they have been drunk at least once.