This paper shows the complexity of European federalism within the political structure of the European Union, placed in the context of twentieth-century politics and the political international relations of European countries at that time. As the topic of the paper is the historical development of European federalism, European political history has gradually been described from the end of World War II up to Maastricht treaty, and through the stages of development of European federalism within the European Union, the reasons for creating common policies have been introduced. In order to understand the current political relations between the political bodies and the institutions of the European Union with national governments, the paper is describing the development of those relations over the course of the twentieth century. The fact is that the current outlook of the political system and political structure of the European Union is due to a long time context, and a strong transnational political system could not be developed with regard to relations between European countries and that the Union was primarily developed according to needs of the average citizen and member states. Therefore, the European Union cannot be described as a textbook federation but should be viewed as a separate and modern political system that has been successful in addressing all political and economic challenges in the European continent during the twentieth century and beyond.