I'm not so sure that you've been keeping tabs on the Azzurrini my friend. For me, Giovinco, Rossi (NT), Balotelli, Criscito, Santacroce, Santon, Acquafresca, Motta, De Ceglie, Paloschi and company definitely have some skills. Also, guys like Cassano (who could join up if he becomes a member of the bianconeri) and even Amauri could add some additional quality to the team in time for 2010.
As for the French, beyond Ribery, I think that Benzema, Nasri, Menez, Gourcuff, Diarra, Clichy, and Diaby, are all quite good players who are 24 or younger, and will improve quite a bit in the next 2 years. Guys like Sagna and Evra are only slightly older... add Frey/Mexes who would get a call up in the event Domenech left and I think they have the makings of a very solid team.
I don't have an intimate knowledge of French football, but I do think that Domenech is the problem; not France's ability to produce quality players. God I hate that man.