We map the pattern and extent of the European integration of core state powers (coercive force, public finance, and public administration) and analyze causes and consequences. We highlight two findings: First, in contrast to historical examples of federal state building, where the nationalization of core state powers precipitated the institutional, territorial and political consolidation of the emerging state, the European integration of core state powers is associated with the institutional, territorial and political fragmentation of the EU. Second, in contrast to European market integration, state elites and mass publics, not organized business interests, are the prime drivers of integration.