The theory of federation provides an accurate description of EU’s func-tioning, a sound explanation of the source of its political legitimacy, as well as a normative guide to its future reform. It is the most coherent among various theories currently competing to answer the question of EU’s political form. Unfortunately, due to its focus on the constitutional aspect of the EU Treaties, it cannot yet properly explain the Treaties’ status-transforming effect on the EU Member States. By returning to the federation theories of Pufendorf, Montesquieu and Rousseau, this article shows that the EU Treaties can be understood as simultaneously having the qualities of an inter-state social contract and a federal constitution. The EU Treaties are therefore a concrete example of national sove-reignty willingly submitting itself to the rule of law in the strict sense.