Abstract The emergence of the United States of America in the eighteenth-century triggered a semantic revolution in the federal principle. Federalism became identified with a mixed structure between international and national organisation. However, when this American tradition crossed the Atlantic in the nineteenth century, Europe's obsession with indivisible sovereignty pressed the novel idea into a national format. This article analyses the European Community and European Union in light of the American and European federal tradition. It explores the analytical potential of American federal thought in examining the European Union along three dimensions: a foundational, an institutional and a functional dimension. The question of Kompetenz-Kompetenz arises. This inductive approach is contrasted with the deductive approach of European thought. Europe's ''statist'' tradition insists on the indivisibility of sovereignty. This leads to three constitutional denials: the European Union is said to have no constitution, nor a people (demos), nor a constitutionalism. The very existence of the European Union, often labelled sui generis, has challenged this tradition and, today, European federal thought has gradually come to acknowledge the idea of federalism beyond the State.