How to design a federation? The European federation is plagued with crises, and these can be linked to our understanding of the basic principle on which any federation is based: subsidiarity. The Treaties present subsidiarity as a legal separation of tasks between the national and EU levels. This interpretation assumes that removing tasks from member states is possible and desirable. Yet attempts to define a legal Kompetenzkatalog failed. Moreover, EU policies based on centralisation—in economic governance, for example—have also failed, and centralised enforcement has not stabilised the euro. Multilevel governance requires an organisational approach to subsidiarity that starts with the recognition that safeguarding the integrity of the member states is essential. However, the EU lacks an administrative model. Subsidiarity may help to fill this gap by recognising that the EU is not about delegating tasks but about managing interdependence between the member states. The organisational understanding of subsidiarity has important implications for the tasks of the European Commission. Rather than being a hierarchical body that focuses on legislation and supervises member states, the Commission needs to focus on the managing of networks: identifying bottlenecks in EU cooperation, supporting team-based inspections and supervising the quality of multilevel networks.