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The European Union's Structural Funds and their role in developing a «European Identity» are the main themes of the present paper. It gives a brief historical overview of the EU Regional Policy and goes on to analyse two case studies: The Shetland Islands in Scotland and the island of Karpathos in Greece. Research was conducted on both islands on the basis of an identical questionnaire. In the end, a direct link between EU Structural Funds and the creation of a European Identity was not established. Nonetheless, other interesting conclusions are drawn.