Since 6 November 2006 there are restrictions on the amount of liquids you can take in your hand luggage, these rules are valid in all 28 countries of the European Union and Iceland, Norway and Switzerland. Nowadays only liquids and gels are allowed with a maximum capacity of 100 milliliters. Liquid in containers larger than 100 milliliters can not got through security and will be destroyed at a later date.
These rules only apply to hand luggage, checked baggage may contain larger quantities of liquids such as a bottle of liquor or a pot of gel. The liquid containers for hand baggage should be placed in a single transparent and resealable plastic bag that measures 20 cm by 20 cm, this makes it easier to check. Every traveller can bring up one plastic bag which holds no more than a liter.
Cooling elements, baby food and different types of medications are permitted as long as you can prove that you need them during the flight. Products that are purchased, after the security check like alcohol and perfume, can always be taken on board, even if they contain more than 100 milliliters.
It is expected that the European Commission will come up with less strict rules in the future. At this moment there are special scanners tested that can analyze liquids, in case these scanners are completely reliable they will be put in use at European airports. Until then the current rules continue to apply.
Here you can find an English explanation of the regulations for bringing liquids and gels in the hand baggage.