This chapter examines the historical evolution, operational mechanisms, and policy frameworks governing the European audiovisual co-production system, with a particular focus on the role of Eurimages as a transnational funding body. It explores how Eurimages has navigated shifting political and economic landscapes since its inception, reflecting on its ability to adapt to the needs of an increasingly globalized audiovisual industry. By analysing internal reports, meeting minutes, and interviews, the chapter provides an in-depth view of the intricate processes shaping co-production policies and practices. Special attention is given to the interplay between national and transnational priorities, illustrating how co-productions serve as cultural diplomacy tools while grappling with market-driven pressures. The chapter critiques the balance between creative independence and bureaucratic oversight within co-productions, highlighting the challenges producers face in meeting the diverse expectations of stakeholders. Additionally, the text situates these dynamics within broader debates about cultural diversity and economic sustainability in the European audiovisual space. By combining historical analysis with policy evaluation, the chapter sheds light on the enduring relevance of co-productions as mechanisms for fostering cultural exchange and financial collaboration in Europe. It also underscores the importance of continually refining policies to align with the evolving needs of producers and audiences alike.