This chapter examines the concept of federalismFederalism as a framework for analysing the distribution of politicalPolitical authorityAuthority in complex constitutional systems, with a focus on the European Union’s economic governance. It traces the historical and theoretical evolution of federalism from an international pact between sovereign units to a constitutive model of shared sovereignty, highlighting its conceptual ambiguities and dual nature—both cooperative and constitutive. The chapter identifies three core principles underpinning federalFederal order: federal integrityFederal integrity (respect for the autonomy and equalityEquality of constituent units), federal loyaltyFederal loyalty (reciprocal commitment to the federal project), and federal adjudicationFederal adjudication (mechanisms to resolve conflicts of authority). Drawing on comparative insights from the United States and GermanyGermany, the chapter demonstrates how these principles structure the balance between self-rule and shared rule. Ultimately, the text advances the notion of federal legality—a dynamic equilibriumEquilibrium grounded in mutual respect, normative clarity, and institutional mechanisms that sustain the coexistence of distinct political authorities within a unified constitutional order.