With reference to the lack of a sovereign European nation or people, constituent power is often dismissed as irrelevant in the context of the European Union (EU). The EU is not a state, the argument goes, hence constituent power is inapposite for understanding its constitutional foundations and developments. In contrast, this paper maintains that the EU fits the constitutional theory of another main political form of modernity namely the federation (Bund): a federal union of states that does not constitute a new state. In contrast to the constitution of a state, the federal constitution is not founded on a unitary act by a sovereign people but by a contract or treaty between the federating states. This contract, however, is not ‘merely’ a treaty of international law because it always entails a double constitutional moment: the birth of a new political and public law existence, the Union, and the transformation of the constitutions of its Member States. However, by creating a common Union, the federal constitution always sows the seeds for a new common federal people or nation. This nascent people can be used to authorise the extension and alteration of the powers of the Union even against the wills of some of its Member States. That is, it has the potential of being used as a constituent power in its own right—something that historically often happens during great crises. The paper concludes with an analysis of contemporary European developments in the light of the constitutional theory of the federation.