With the creation of EMU, European Welfare States have entereed a new phase of development. The margins for manouvering public budgets have substantially decreased, while the unfolding of the four freedoms of movement within the EU have seriously weakened the traditional coercive monopoly of the state on actors and resources that are crucial for the stability of redistributive institutions. The article explores these issues adopting a Rokkanian perspective, building on Rokkan's pioneering insights on the nexus between boundary building and internal structuring. The first part of the paper briefly presents the theoretical perspective. The second part sketches the development of national welfare institutions from their origin up to the early 1970s, discussing their implications in terms of boundary building and internal structuring. The third part discusses the challenges that have emerged in the last couple of decades to the "social sovereignty" of the nation state: challenges that are largely exogenous, but partly reinforced by endogenous developments as well. The final part offers some more speculative remarks of what the author calls "capped sovereignty" for the institutional architecture of social protection, with some hints at cross-national variations and possible developments at the EU level.