Abstract The constitutionalisation of the EU has been not without its challenges. However, putting aside the apparent political difficulties of the constitutional process, this article argues that, because the further constitutionalisation of the EU depends on its ability to assimilate some features of a federal state, there are, at least, two reasons why the EU is not yet ready for its constitutionalisation. The first reason is that its excise duty system, which permits discriminatory and protectionist behaviour by Member States, prevents the EU from achieving its fundamental objective of an internal market. The second reason is the EU's budget, which is so small that it is doubtful whether the EU will survive its continuing enlargement. As a solution to this problem, this article introduces section 90 of the Australian Constitution, which provides the Commonwealth of Australia with the exclusive power to levy excise duties. The article argues that the adoption, by the EU, of a similar fiscal arrangement would remove the discriminatory and protectionist operation of its excise duty system and help enlarge the size of the EU's budget by providing it with a self- financing mechanism.