Regional aid is the second biggest item in the EU budget, accounting for 30% of the total in 2005.
Most of it is used to boost the economies of poor, remote or under-populated parts of the European Union.
Spain has traditionally been the biggest recipient of these funds, as can be seen in the chart below. Regional aid to Germany goes mainly to the former East Germany, while aid to Italy goes mainly to the south.
The accession of 10 new states in 2004 led to a sharp fall in the average wealth of EU countries. Spain has become a relatively well-off country and faces a reduction in its share of regional aid funds after 2006.
Only two of the older EU states, Portugal and Greece, remain poorer than the EU average.
Portugal's regional aid grant in 2004 was equivalent to 2.6% of the country's gross national income, while Greece's was equivalent to 1.7%. The EU average was 0.34%.
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