The paper presents a methodology for developing earthquake damage and loss scenarios for urban areas, as well as its application to two cities located in Mediterranean countries, Grevena (in Greece) and D$ddot{u}$zce (in Turkey), that were struck by strong earthquakes in the recent past. After compiling the building inventory in each city, fragility curves were derived using a hybrid approach previously developed by the authors, and a series of seismic scenarios were derived based on microzonation studies that were specifically conducted for each city (see companion paper by Pitilakis et al.). The results obtained in terms of damage estimates, required restoration times and the associated costs are presented in a GIS environment. It is deemed that both the results obtained, and the overall methodology and tools developed, contribute towards the enhancement of seismic safety in the Mediterranean area (as well as other earthquake-prone regions), while they constitute a useful pre-earthquake decision-making tool for local authorities.