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How can one convince potent nation-states to put their sovereignty at risk in common European policies? EU cohesion policy, now one-third of the EU budget, provides such a puzzle. Until 1988 the European Commission shared out money to national governments with few strings attached. Since the reform of 1988, national governments are required to negotiate with the Commission and regional authorities on how to use the money. Has this European-wide policy eroded national sovereignty in favour of a stronger role for the Commission and more power for Europe's regions? The first part of the book probes into the policy dynamics at the European level. In the second part, eight country studies evaluate the impact of uniform EU policy on territorial relations by comparing policy making before and after the reform. The concluding section explains persistent variation in EU cohesion decision making and implementation.