I was playing with this in my head the other night. It's completely impractical, but what if the groups for Euro 2008 were put together based on geography? You might have something like this...
Ok, Portugal isn't exactly in the north, but they had to go somewhere. These groups actually ended up pretty well-balanced. You have two quarterfinalists in the Northern and Eastern groups. The Mediterranean Group ends up with three and the Alpine only one, but still the competitive balance isn't too bad. Perhaps we could go old school NHL and name the groups after European legends- the Eusebio Group, the Cruyff group, the Beckenbauer group, etc. I'll send a note to UEFA and see what they think.