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English failure in Europe is an indictment against the Premier League

There are wholly unrelated and individual reasons why England's clubs all failed to achieve positive results this week in the Champions League. There always are. Arsenal throwing away a 3-0 lead at home was a freak result (in statistical terms, at least), Liverpool seemed to play for a narrow defeat in Madrid, Chelsea weren't under any real pressure to win at Maribor and Manchester City ... God knows.

But a look at recent seasons suggests that these shocks should no longer come as a surprise. Since leading UEFA's country coefficient rankings in 2007-08 -- the year of the all-English Champions League final in Moscow -- Premier League clubs have slowly but steadily chalked up less impressive results in European competitions.

(The UEFA ranking measures Champions League and Europa League performances. With roughly the top third of the big leagues being assessed, they give a pretty good account of the average strength of the bigger sides in their respective countries.)

Spain took over first place after the 2012-13 season. Now, England are in acute danger of slipping to third place. As things stand, Germany could well be rated as the second-strongest league in Europe come next August.

Man City are spending so much money but failing in Europe. It simply shouldn't happen.

Time for a few caveats. First and foremost, England's slip has no practical consequences whatsoever. They will still keep their four starting places as the third-best league for years to come. (Fifth-placed Serie A have no realistic chance of challenging either Germany or England in the foreseeable future.)

The damage to the Premier League "brand" will be negligible, too. Their global TV hegemony began in the 1990s, a time when English clubs were miles behind the European competition. Fans and neutrals obviously value the product, irrespective of doubts about its relative quality.

But the fact that the Bundesliga is likely to be ahead of the world's wealthiest league for the first time since 1999-2000 should still set alarm bells ringing. Something is very wrong when German clubs, who collectively make one billion pounds ($1.59bn) less than the Premier League (turnover: £2.7 billion/$4.29 billion in 2012-13), achieve better results. Last year's figures will show that the financial gap has actually widened further due to the new Prem TV deal. The Bundesliga shouldn't even be close as far as on-the-pitch performances go.

So what's happening?

One paradoxical answer is that the Premier League's weakness in Europe might actually be a consequence of its strength, as far as the high levels of internal competitiveness goes. Germany has Bayern; Spain boasts Real Madrid and Barcelona. They dominate their local markets and can use those positions for leverage in Europe; no English team is in a similar position.

But as an explanation, this still falls flat. The above-average power of Bayern, Madrid and Barca should logically be offset by the below-average power from inferior teams from those leagues. Yet the numbers suggest otherwise.

Schalke 04 (turnover £161m/$256m in 2012-13) have performed better than Arsenal (£283m/$450m in 2012-13) over the past five seasons in Europe, while Leverkusen (£78m/$124m in 2012-13) are currently ranked higher than Manchester City (£271m/$431m in 2012-13). And so are FC Basel, by the way.

Schalke have been performing better than Arsenal, further proof of the Prem's shortcomings.

With their bafflingly inadequate showings and systematic targeting of top players from other English Champions League sides, Man City have unwittingly done more than others to break the Premier League hegemony in Europe after 2008. Their rivals either lost key personnel to the Etihad or had to tie them down at vastly inflated wages to ward off advances. Wayne Rooney's 300,000-pound-per-week ($478,000) deal is the perfect example.

But in a sense, the new money from Abu Dhabi has only exacerbated an existing trend. Too much money is chasing too few (genuine) talents in the Premier League, too much capital is tied up in 19-year-old left-backs who cost 30 million pounds ($48m) like Luke Shaw and indigenous quality is subsequently spread too thinly between the top clubs.

On top of that, the lack of properly functioning supply lines -- either from within each club or the league itself -- creates immense pressure to buy abroad. So you end up with a desperate Manchester United paying 60 million pounds ($95m) for Angel Di Maria -- about 15 million ($24m) more than PSG and Bayern Munich were quoted for the winger a few weeks earlier. As long as wages and transfer fees in the Premier League continue to simply increase in line with revenues, England's financial edge over the rest of Europe will continue to be neutralised.

Clubs like Atletico Madrid prove that spending more money doesn't buy you titles but English clubs remain unmoved.

There's a bigger cultural issue, too. Ever since Chelsea and City became superpowers with the help of wealthy owners, the mentality has set in that only huge financial investment can bring success. You can see it in the public discourse: it's all a matter of spending big on new, better players or bringing in new and better coaches. To a man with lots of money in his pocket, every problem looks like it can be solved with cash. It's as if there are no other options being considered.

English football would immensely profit (no pun intended) from a Dortmund or Atletico Madrid, who have shown that there are other ways to get ahead. With cutting-edge coaching, for example. BVB won the league in 2011 with a wage bill of 46 million pounds ($73m) -- the equivalent of Stoke City's in the same season. Maybe Southampton can change the mindset, but don't hold your breath.

Spain's second-tier clubs, and all German teams below Bayern, had to learn to be smart with their relatively modest resources. There is no secret, just good practices. They scout better, produce more decent players from their academies and rely on vast local managerial know-how that naturally throws up reasonable candidates. Again, the contrast is sharp: Harry Redknapp is the only English manager with any Champions League experience over the past decade.

It's far too early to say whether German clubs will continue to outdo the Premier League on the international stage. Borussia Dortmund might not be there next season, while new Champions League qualifiers like TSG Hoffenheim or Borussia Monchengladbach could find themselves ill-equipped to perform at that level. The UEFA rankings can't predict the future, but they do provide an objective insight into the recent past and the present. And in England's case, it's nothing short of an indictment.

Raphael Honigstein is ESPN FC's German football expert and a regular guest on ESPN FC TV. He also writes for the Guardian. Twitter: @honigstein.

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