In this chapter, the role and funding of political parties at the level of the European Union are analyzed. These European political parties are functionally very different from their national counterparts. They are to be considered as proto-parties, in the sense that their main task is to create a network of national parties and politicians. The introduction of EU public funding for the Europarties in 2004 was aimed at their further development: the goal was to provide the Europarties with the necessary financial means to evolve into full-fledged party organizations that are able to contribute to the development of the European public debate and political system. Together with these subsidies, the European legislator also introduced regulations on income and expenditure restrictions and on transparency and control. We find that the establishment of this party finance regime at the level of the European Union had an impact on both the EU party system at large and the organization of the individual Europarties, resulting in an evolution from a proto-party system to a fully developed party system.