The aim of this report is to demonstrate that regions like mountain areas have a specific relevance in the debate on territorial cohesion in Europe. The central premise is that, truly construed, Territorial Cohesion focuses on targeted assistance to areas most in need and thus has to highlight strategies and policies required to address the needs and the opportunities of the worse off areas. A review of the evolution of the concept and the existing literature and studies tends to support this analysis.<br /> <br /> An examination of challenges and opportunities facing mountains illustrates the wealth and diversity of mountain areas in physical, climatic and cultural terms despite their basic commonalities it is widely accepted that there is a general need to recognise mountains as a distinct area and to evolve criteria for sustainable land use.<br /> <br /> Through the provision of positive externalities mountain farming contributes to the economic and social wellbeing of the European population in general and to the maintenance of settlement structure and shaping the cultural landscapes in areas which otherwise would lose significant parts of their development potential. Since by definition public goods are not rewarded in the market, there is an obvious case for transfers from society at large to reward those who maintain such public goods – a mechanism that would also contribute coincidentally to territorial cohesion. Nor is the contribution of mountains to the European Union confined to the externalities of land management but it extends to quality goods and skills and a robust capacity to innovate and experiment borne of adversity.<br /> <br /> Mountain regions are a considerable part of European (mainly rural) areas and greatly reflect the situation in peripheral contexts. As such they are an important case for the development of territorial cohesion objectives across Europe.