Territoriality makes EU Cohesion policy into a battle ground. The struggle is over the size and targeting of funds, including its targeting in space which raises issues of state sovereignty. The underlying assumption is one of ‘absolutistic territorialism’, whereas social science thinking promotes ‘relativist constructivism’ allowing for compromise. The ensuing struggle sees European Commission initiatives concerning Cohesion policy being countered by the reassertion of state territoriality. This becomes manifest in multilevel governance. The underlying issueis whether representative democracy operating on the assumption of absolutistic territorialism can deal with functional interdependencies implying new cross-border configurations, and with this, relativist constructionism.