If it was a case of only the starting XI, then England would be up there, but beyond 15 or so core players, I think you begin to see a noticable drop in quality.
However, I don't think this in itself is an excuse for failure. Germany have similiar strength-in-depth problems, yet got to the Euro 2008 final, the 2006 WC semis, and the 2002 WC final.
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