It seems a bit ridiculous that some people can suggest that nations be ranked based on a domestic competition. This is stupid. Do we rank Souths as the number 1 club last year, because they have a good junior setup? If a country plays internationals, they deserve a ranking based on those results. If they choose to play with weaker than full strength teams, then so be it. It is up to other nations to improve and beat them. Yes, Holland (for example) will not beat Italy and raise above them (due to expats). So be it. They wont beat New Zealand either. But they do have a good chance to beat Germany, Austria or Czechs. Let them get the enjoyment and satisfaction of doing this on the field and not in the administration building.
Due to the very few internationals played, i think that you need to go back much further than 2 or 3 years with results, even though you can give more weight to the recent results (eg France). Also, as good as this ranking is, there needs to be a website somewhere that lists the actual results of the international sides, so that you can see why nations were ranked where they are (assuming they are not using some type of points formula).
Not that anyone cares and without referring to other rankings, i would expect rankings should look something like this:
1. England - Undisputed Standing.
2. France - European Champions and performed well against NZ and Aust.
3. Lebanon - Undefeated in Europe for some time and hold recent win against French
4. Wales - Consecutive 4th Placings in World Cups and seem to be gaining in depth.
5. Ireland - Underated, pushed England hard in last WC and have done very well in European Tournaments.
6. Italy - Very unlucky not to qualify for last WC, after losing to Lebanon but beating France.
7. Scotland - Have been very solid consistently against other British nations, but cant quite take the next step.
8. Malta - Good win against Lionhearts and also have previously done well against southern hemisphere opposition.
9. Greece - A very good side about the same level of Malta and Ireland.
10. Russia - Consistently qualify for Euro cup and beat Georgia well.
11. Georgia - Not too far from Russia after qualifying for Euro Cup.
12. Holland - I am fairly certain that they beat both Georgia and Serbia
13. Serbia -
14. Germany
15. Other nations who have not yet played a game
Looking at those nations, a European Cup would be a very good competition. Maybe more exciting than a World cup.