Financing agri-environmental programmes in the European Union (EU) takes place in a multi-level system with mixed co-financing and shared financial responsibilities. In this paper we analyse how co-financing influences policy-making in regions taking the case of the agri-environmental programme in Saxony-Anhalt. Using an interactive linear programming approach the implications of several co-financing scenarios are analysed. EU co-financing certainly enhances the financial volume for the agri-environmental programme in Saxony-Anhalt; but as regional policy-making is distorted by the scheme of mixed co-financing as compared to unconditional financial transfers, the priorities for measures vary depending on different EU co-financing scenarios.