The European Union has been successful economically by opening markets, but lacks political organization. The idea of a successful Europe is not about making everything the same, but embracing diversity. To improve citizens' welfare, competition between different levels of government should be encouraged. A new type of federalism called Functional, Overlapping Competing Jurisdictions (FOCJ) is proposed, where governments emerge based on citizens' preferences. Local units should have the freedom to form FOCJ and collect taxes for public services.