This report assesses the environmental and social impacts of the Financial Instrument for Fisheries Guidance (FIFG), running from 2000 to 2006, using a range of quantitative and qualitative information. EU allocations for FIFG totalled €3.2 billion, of which Spain received nearly half. Member State contributions brought the total allocation of FIFG funding to €4.9 billion.A key objective of structural policy in the fisheries sector was to bring the fishing capacity of the European fleet into line with available biological resources. We identify that FIFG funding has not achieved the intended net fishing capacity reduction and, in some fleet segments, has led to fleet capacity increases. This has contributed to the worsening status of some stocks and has hindered the recovery of other stocks, as well as having had associated negative impacts on marine environment.