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Creating a hierarchy of the world’s most liveable cities is a Herculean task. But after weeks of number crunching, earnest deliberation on the meaning of the ever-changing metrics and chewing the fat over the impact of infrastructure projects, our quality of life results are set.

Of course, there is always the odd tiff between editors when a much-loved city plummets down the league table or doesn’t make the grade (let’s just call it rigorous debate, shall we?) But, all is fair in love and quality of life assessment. And this year’s results are certainly a shake-up on last year’s verdict.

But that won’t come as a huge surprise; it has been a tumultuous 12 months for European cities as a whole. The vicissitudes of the global markets are keenly felt at City Halls from Rotterdam to Riga and sadly the fiscal crisis has seen some favourites slip out off our top deck as their youth unemployment soars and business opportunities slide. Urban flair, strong leadership and efficient transport all count in our pecking order but what’s the point of a trail-blazing Autolib’ car scheme (Paris) or even a plucky new mayor (Madrid) when hundreds of thousands of young people are out of work?

Which is why, this year, we have added a few telling tests of civic commitment into the mix. Leisure has been top of our agenda. An outdoor pool or well-maintained swimming lake can make all the difference to a community’s health, not to mention the joie de vivre of a city. Azure blue looks great on the page but we believe the ability to splash and spa act as keen barometers of a city’s integrity.

It’s no coincidence that Vienna, which has an impressive 23 lidos and over a dozen riverside lakes, has fared well this year. Beyond its bucolic parks and inner-city vineyards the Austrian capital’s cultural gusto and sunny disposition in the face of tightening budgets has trumped many other contenders.

Our usual indicators of crime, healthcare, state-funded education and business climate are all still here. But this year we also sent our correspondents out to tot-up the number of bookshops from Auckland to Oslo. We believe these purveyors of Molière and Murakami are key cultural, economic and civic indicators.

And then there are the big events. Much vaunted projects can fail to emerge leaving residents disappointed and international onlookers bemused. We are, of course, talking about Berlin whose Brandenburg Airport has unexpectedly delayed its opening from this summer until March 2013 – a poor show for the capital of Europe’s indomitable economy. Big projects require vision and our fastest climbers like Hamburg have pulled off major infrastructure improvements that have pushed them up the hierarchy.

After six years of this index, we’ve learnt to ignore the computer projections and architects’ models and base our rankings on what’s built and functioning. So many cities have grand designs in the offing but still lack commitment to change. Paris, for instance, is still beautiful, clever and chic but stubbornly aloof and is yet to tackle the blandness and defeatism of the banlieues.

Which is why our winning trio of European visionaries deserve their lot. Yes, they are all beautiful, elegantly mature and surrounded by water. But they are also brave innovators undeterred by the fiscal pinch.

01 - ZURICH

2011 ranking: 02 | 2010 ranking: 03

To the outsider, Zürich seems easy to crack – it ticks all Swiss lifestyle clichés with its well-mannered streets, clean suburbs and strict corporate culture. Here, everybody drives a convertible, wears a suit and, of course, is a financier.

The outsider is right. Sort of. Zürich is an economic powerhouse. The world’s fourth most important financial centre, after New York, London and Tokyo (Singapore and Hong Kong might complain though), the city generates about a fifth of the Swiss national income and employment. Its Paradeplatz is packed with banks, insurance companies and burnished bankers in, yes, suits. Finance accounts for 77 per cent of all jobs in the city.

Amid the well-groomed financiers, Zürich’s touch of benign chaos comes from its arts scene. Home to more than 50 museums, theatres and concert halls, and lots of smaller galleries, the city’s cultural life is varied. As well as the reopening of the Löwenbräu building, which will house the Kunstalle, Hauser & Wirth and the Migros Museum, this year sees the launch of the new “Art and the City” festival. Much of the city’s charm is in its indie, off-the-beaten-track art gems. Take a stroll on Limmatstrasse on your way to the Viadukt and you’re likely to stumble upon Industriehof. Built in 1929 by Fritz Fischer architects, the former showroom and garage of Zürich’s legendary car dealer Emil Frey is now home to galleries such as BolteLang and Lullin+Ferrari.

“The art scene has always been quite exiting here,” says Corrado Ferrari, a 15-year art industry veteran. “Zürich has a rich cultural history and long traditions in art dealing. It is a wealthy city – therefore there is a market for different types and sizes of galleries.” Ferrari’s partner, Etienne Lullin, adds, “That’s the power of Zürich – there is place for everyone.”

It’s also a city constantly trying to be better. Influenced by a growing number of German, Chinese and British immigrants, Zürich has been slowly changing its ways: independent local retailers are starting to pop up throughout the city and there are more shopping options on Sundays and late evenings, with retail areas developing at the train station and the airport.

The recent financial turmoil may have damaged some of the city’s banks but it also encouraged entrepreneurship, with an increasing number of young people setting up their own businesses and about 30 start-ups in fields ranging from technology to medicine just last year. “The risk culture in Zürich is quite low,” explains Michel Bachmann, co-founder of Hub Zürich, the Swiss spin-off of the London-based start-up incubator. “The locals would always do their homework well, research all options and have it all planned before they decide to invest in a start-up. The government has always been supportive of hi-tech businesses; now we are trying to attract more investment in organic farming and innovative education start-ups.”

Some of Zürich’s charms – low-rise buildings, village mentality and prosperity – are also its weak points. One of the city’s main concerns remains the property shortage and housing affordability. The 36-storey Prime Tower, Zürich’s first skyscraper might stick out like a sore thumb, but it symbolises the city’s commitment to address the commercial space dearth and rethink urban planning.

“Our land-resources are limited,” says Anna Schindler, the city’s urban planning director. “Zürich is just not big enough but it’s been slowly expanding recently. We had 5,000 apartment units in construction last year. We are still facing serious housing shortage issues and have to tackle real estate and rent prices.” Most of the city’s focus has been in Zürich Nord, the area between the airport and the city, and Zürich West, a former industrial wasteland which has been transformed over the past decade and is now home to artists and designers and the sort of thriving, edgy nightlife you would expect such a crowd could produce. A new tramline, built at a cost of chf150m (€125m), now connects the neighbourhood with the centre, with trams running every five minutes and a punctuality rate of a very Swiss 96 per cent.

“Zürich is a piece of heaven,” gushes Fabian Brunori, manager of Kronenhalle restaurant, a regular meeting point of the local elite since 1925. The 25-year-old retuned to Zürich after years of training at hotels and restaurants in Vancouver and New York. “Here you can have it all – the lake, the parks, everything is so close and clean. And very Zürich.”

Here is Zürich’s great intangible: to the outsider it might look like a stiff, Swiss-timepiece-punctual city, but it’s a place where locals go for a pint on a sunny roof top terrace overlooking the Altstadt after spending a lazy Sunday sunbathing at the lakeside or swimming at a Badi. It’s a city where one can wander on the hilly, cobblestone-paved Kirchgasse browsing through its charming antique bookstores, spend a day admiring art at Kunsthaus, or get adventurous exploring a new indie boutique in the more industrial Lagerstrasse.

Brunori’s enthusiasm is shared by entrepreneur-cum-fashion designer Peter Nizt. The New Yorker moved here 16 years ago and has no plans to relocate. “Why would I? Everything is so organised and easy here. It’s a great lifestyle and you can easily get on the plane and travel to virtually anywhere in Europe,” he says, while sipping drinks on his sun-drenched terrace overlooking charming red-bricked roofs. How about Sunday’s conservative closing times? “I got used to it but yes, I was very annoyed at the beginning having to plan my Sunday’s grocery needs in advance. Now I don’t mind. I have more time for other things and there are nice restaurants where you can opt for a good well-priced meal.”

To its loyal residents Zürich offers the perfect urban cocktail of understated chic, connectivity and a bustling art scene served on leafy lakeside quays. Yes, it might be too perfect, too peaceful, too pretty. But surely too much peace and beauty can’t be that bad for you.

Population: 390,082 in the city; 1.39 million in the canton of Zürich.
International flights: 196 international destinations (up from 179 last year) of which 61 are intercontinental.
Crime: murders, 16; domestic break-ins, 4,861 (down from 5,260 in 2010).
Education: there are 14 higher education institutions in the canton, including University of Zürich and the renowned Swiss Federal Institute of Technology (eth). Both are publicly funded. Healthcare: 16 hospitals and three highly specialised university hospitals; 416 citizens per doctor (up from last year’s 410).
Sunshine: 1,482 hours annual average.
Temperatures: average high in July 22.9c; average low in January -2.8c.
Tolerance: Since January 2007, gay couples have been able to register at the civic registry office.
Drinking and shopping: most bars are open to 03.00 in the week and until 04.00 on Friday and Saturday. Sundays all retail closes except at the main train station.
Cycling: 7 per cent of commuters cycle to work.
Electric car charging points: 16
Public transport: price of the cheapest tram and bus ticket: chf2.60 (€2.20), daily pass costs chf5.20 (€4.30).
Culture: the canton invested about chf128m (€108m) into cultural activities and institutions last year. There are 18 cinemas in Zürich, and about 50 museums.
Access to nature: a 20-minute train ride takes you to the Üetliberg mountain with a magnificent view over the city and lake. Alternatively, take a boat for a cruise on the lake, or visit the Werdinsel – Zürich’s island in the city.

02 - HELSINKI

2011 ranking: 01 | 2010 ranking: 05

A new entrepreneurial spirit is making this changing city more creative than ever. Anyone visiting Helsinki, especially this year, while it acts as the World Design Capital, won’t help but notice all the activity.

From the shopping districts to the former docks, companies are being set up, grass-roots projects initiated and art galleries opened. Ever since Finland entered the EU in 1995, Helsinki has slowly but surely become more dynamic. It’s been a while since the Finns displayed such national pride over their architecture, food, design, school and social model.

On the infrastructure side, former harbours are turning into residential areas and a new metro line will make reaching western parts of the city easier. Overall, our winner last year still delivers one of the world’s best living environments.

Population: 595,000 in the city; 1.3 million in the greater metropolitan area.
International flights: 130, with 16 intercontinental destinations.
Crime: murders 6; domestic break-ins 325.
Education: It’s free and 37 per cent of the population has a university degree.
Sunshine: 1,858 hours annually.
Temperatures: average low in January minus 10.4c, average high in June 21.7c.
Diversity: only 7.6 per cent of the city’s residents are non-Finns.
Cycling: accounts for 8 per cent of all daily commuting. The city’s aim is to bring this up to 15 per cent by 2020.
Unemployment rate: 7.6 per cent.
Electric car charging points: 6, with 700 more to be installed by 2015.
Culture: 10 cinemas and 72 museums.
Outdoor pools: 2 and about 30 beaches.
Green space: One third of the city.
Environment: 76 environmentally friendly buses will be on the streets by 2013.
How easy is it to start a business? Quite easy. It requires a registration at the National Board of Patents and Registration, which takes a few days.
Key developments: When finished in 2015, the western metro extension will transport over 100,000 passengers daily.
Monocle fixes: We’d like to see more daring architecture and small hotels.

03 - COPENHAGEN

2011 ranking: 03 | 2010 ranking: 02

The UN rated the Danes as the happiest people in the world again in 2012, and you don’t have to spend much time in their capital to understand why (clue: it isn’t the weather). There is a sense of ease to everyday life here, thanks in part to an ever-improving transport infrastructure (check out those bike super highways, the metro, the trains), and the increasing numbers of cyclists, but also to the Danes’ approach to life in general. Foreigners who move here to work always remark on Copenhageners’ life-work balance – the shorter but more efficient working hours, the emphasis on making the most of the outdoors and on family life. The Danes are less burdened by the puritanical streak of other Nordic peoples but that doesn’t mean they lack principles: just watch their capital achieve its goal of becoming co2 neutral by 2025.

Population: 549,050 in the city; greater Copenhagen 1.7 million.
International flights: 140 destinations, of which 24 are intercontinental.
Crime: murders, 9; 4,121 domestic break-ins.
Education: about 30 per cent of the population has a higher education degree.
Temperatures: average high in July 17.2c, average low in January 0.2c.
Drinking: many bars and clubs are open until 04.00 or 05.00 during weekends.
Cycling: about 400km of cycle tracks, 50 per cent of Copenhageners commute by bike to work or school daily.
Unemployment rate: 8.1 per cent.
Electric car charging points: 50.
Culture: the city hosts about 70 festivals, there are 24 theatres, 150 museums and galleries and 24 cinemas.
How easy is it to start a business: Denmark was ranked the second easiest place in Europe to do business in 2011.
Key developments: Copenhagen Connected is a public-private airline route development fund with a budget of dkr200m (€27m) for 2010-14 aiming to attract new airline routes to Copenhagen
Monocle fixes: lower the direct income tax and vat – the highest in the world. A road bridge across the northern harbour would open up the military area, Holmen, and improve congestion in Christianshavn.

04 - VIENNA

2011 ranking: 06 | 2010 ranking: 08

Traditionally slow to change, Vienna is fast adopting future-forward ideas without losing its old-world charm. New transport infrastructure has been installed and more is on the way (the Westbahnhof opened in late 2011; parts of the vast main train station complex open at the end of the year).

Fresh initiatives are creating new affordable housing. The mak and mumok art museums have updated looks. There is an architectural competition this summer to revamp Schwedenplatz square. The campus of the Vienna University of Economics and Business opens next year in the ever-hipper second district, with a Zaha Hadid-designed library. Somehow Vienna – the only capital with vineyards within its city limits – just keeps getting more attractive. If only its airport would get up to speed.

Population: 1.7 million in the city and 3.6 million in the metropolitan area.
International flights: 174 destinations, of which 31 are intercontinental.
Crime: murders, 21; domestic break-ins, 8,630.
Sunshine: annual average, 2,242 hours.
Temperatures: average high in July, 19.4c; average low, 1.1c in January.
Tolerance: gay marriage has been recognised in Austria since 2010, however racism remains a problem – Zivilcourage and Anti-Rassimus Arbeit identified 706 cases of racism in 2011. Unemployment rate: 9.2 per cent.
Electric car charging points: 31, plus extra points for charging e-bikes.
Culture: The Viennale film festival celebrates its 50th anniversary this year and the “21er Haus”, a renovated Expo pavilion, will now host art exhibitions under the auspices of the Belevedere museum.
Outdoor pools: 10, plus 13 “beaches” on the banks of canals or river.
Bookshops: 91
Green space: about 50 per cent of Vienna.
How easy is it to start a business? It’s quick unless the business is in a regulated sector (in which case registration takes six weeks). Funding is available for start-ups; there are extra subsidies for women business owners.
Monocle fixes: better retail opening hours on Sundays. The arrivals area of the Vienna airport needs serious help. It’s currently rundown and disorganised.

05 - MUNICH

2011 ranking: 04 | 2010 ranking: 01

Munich may be Germany’s third-largest and wealthiest city (and as a famous joke has it, Italy’s northernmost outpost) but urban planning is in gridlock. Munich lost a bid to host the 2018 winter Olympics to Pyeonchang, South Korea, last year, and progress on two major urban projects – a second axis in the well-planned but overloaded public transport system, as well as a third runway at Munich airport – are stalled. A referendum takes place on the runway issue this summer but the much-needed transport overhaul will take longer.

The bigger issue is: do Munich residents care? Unemployment is low, wonderful hotels (like the Louis) continue to open, the Residenztheater has a new director and beer flows. In the words of a longtime native, “Munich is stagnating a bit but on a very high level.”

Population: 1.4 million in the city and 5.5 million in the metropolitan area.
International flights: 158 destinations, of which 40 are intercontinental.
Crime: murders, 2; domestic break-ins, 1,998.
State education: 2011 saw a sizeable spike in students matriculating into Munich’s universities – a rise of 31.2 per cent.
Healthcare: Munich has an impressive health infrastructure. There are 45 hospitals in the city with 4,799 doctors overall.
Sunshine: annual average, 2,073 hours.
Temperatures: average high in July, 23c; average low, minus 5c in January.
Drinking and shopping: stores can be open between 6.00 and 20.00 in Bavaria. Bars can stay open until 05.00.
Unemployment rate: 5.1 per cent.
Culture: cinema screens: 81
Spas/gyms: 91 gyms, plus 37 spas and saunas.
Green space: 4,846 hectares of “recreational space” (15.6 per cent of the city’s area).
How easy is it to start a business? One notable change is that fewer people are starting businesses now because the labour market has picked up.
Key developments: the Lenbachhaus, one of the most beloved museums in the city, reopens after a big four-year renovation by Foster+Partners in early 2013.
Monocle fixes: Munich keeps getting more expensive. An initiative promoting affordable housing would be more than welcome.

06 - MELBOURNE

2011 ranking: 05 | 2010 ranking: 09

It isn’t easy playing second fiddle to a bigger and more popular sibling, as residents of Melbourne are surely aware. One way to burst out of the shadow of global brand Sydney, a method employed clearly by Australia’s second city in the past year, is to simply take everything it does and go one better.

A raft of sleek new construction projects carried on for the second year in a row, as Melbourne continued to grow both demographically and in stature. A London-style congestion levy in the downtown area seeks to ease some of the strain of that growth, while helping maintain the city’s unique charm: the cramped laneways packed with cafés in which any Old European would feel at home sipping on a thick espresso. This vibrant city of the arts has proven there’s no harm in coming second.

Population: 98,860 in the city; 4.14 million in the greater metropolitan area.
International flights: 28
State education: with eight public universities, 53.1 per cent of residents have a higher degree.
Temperatures:** average high in January, 25.9c; average low in July, 6c.
Drinking: 1,565 licensed premises, of which 593 are open after 23.00.
Cycling: more than 11 per cent of commuters use bikes on a daily basis and there are 120km of bike lanes to accommodate them.
Bookstores: 78, of which 69 are smaller chains or independent shops.
Outdoor pools/spas: two and 34 gyms.
Unemployment rate: 3.7 per cent.
Electric car charging points: 100 15amp electric vehicle charging stations.
Culture: 23 theatres; 28 museums.
How easy is it to start a business? It takes two days; with the recently introduced new National Business Names Registration System it costs au$30 (€24) to register a business name for one year.
Key developments: Convesso Concavo building at the Victoria Harbour. When completed later this year it’ll offer 220 residential dwellings and retail space.
Monocle fixes: sort out congestion. Melbourne is poised to overtake Sydney as the country’s largest city and traffic can slow to a crawl.

07 - TOKYO

2011 ranking: 09 | 2010 ranking: 04

Even people who claim to dislike cities are won over by Tokyo’s civilised charm. Its reputation as a neon-lit city of the future is, to some extent, justified but what strikes outsiders most are the quiet backstreets and the almost small-town sense of civic responsibility. Tokyo has all the benefits of the big city: first-rate public transport, restaurants, shopping and culture, with few of the downsides. The streets are clean and the crime rate impressively low. In Haneda – now a full international as well as domestic airport – Tokyo also has one of the most efficient airports in the world. Most remarkable is the way the city’s residents go about their business. If you tried to replicate Tokyo in another country it wouldn’t work since what really makes Tokyo function so well is its courteous, hard-working inhabitants.

Population: 8.9 million in the city; 13.1 million in Tokyo Metropolitan Prefecture.
International flights: 111 destinations, of which 61 are intercontinental.
Crime: murders (in the city), 85; domestic break-ins (in the prefecture), 5,779.
Education: 93 universities (nine of them are national and publicly funded universities). 65.5 per cent of senior high school students went on to university in 2011.
**Temperatures:
average high in August, 27.5c; average low in January, 1.5c.
Public transport: Subway ticket: ¥160; train at ¥130 and bus ticket is ¥200.
Unemployment rate: 4.8 per cent (prefecture).
Culture: 15 publicly funded museums.
Outdoor pools/spas: 1,035 publicly funded sports facilities, including 55 outdoor and 109 indoor pools.
Green space: the ongoing Green Tokyo Project aims to create an additional 1,000 hectares of green space and double the number of trees from 2007’s level by the end of 2017.
How easy is it to start a business? For international businesses at least one of the founders has to live in Japan.
Key developments: Tokyo is in the running for the 2020 Olympics, which would spark a flurry of renovation. Construction is due to start this year on Tokyo’s new fish market.
Monocle fixes: freely available wi-fi should be standard in a city with so much state-of-the-art handheld technology on display.

08 - SYDNEY

2011 ranking: 07 | 2010 ranking: 12

The word that best describes Sydney is “confident”. If for years the largest city in Australia sagged under the weight of some supposed lack of urbanity, then those days are over.

Sophisticated construction projects such as Frasers’ uber-green Central Park complex – a mixed-use district of vertical gardens, shopping and residential buildings in the heart of downtown – help lend credence to Sydney’s claim to be the southern hemisphere’s most cosmopolitan city. Sporty Sydneysiders can cycle from wine bars and world-class bistros in leafy Surry Hills to premier cultural events such as Sydney Writer’s Festival.

One wag remarked that Sydney was “like New York, only with beaches and better seafood.” Add to that an economic and cultural swagger and you’ve got it about right.

Population: 185,422 in the city; 4.63 million in the metropolitan area.
International flights: 84 destinations, of which 66 are intercontinental.
Crime: murders, 43; domestic break-ins (in the metropolitan area), 22,302.
State education: five major universities, including the country’s two flagship institutions, Sydney University and the University of Technology Sydney.
Temperatures: average high in January, 25.9c; average low in July, 8c.
Shopping: most of the shops in the downtown area close at 19.00 or earlier.
Unemployment rate: 4.8 per cent.
Culture: the new state government has its eye on boosting nsw’s cultural infrastructure, including an au$800m (€628m) renovation of the Sydney Opera House and an expansion of the Art Gallery of NSW.
Outdoor pools/spas: five outdoor pools, six community centres, and dozens of sports facilities.
Bookstores: 40 big chain and franchise shops; 90 independent shops and about 70 antiquarian bookshops.
Key developments: Green Square – an au$8bn development of retail, residential and community facilities.
Monocle fixes: a safe and convenient bike network linking central Sydney and surrounding suburbs would make cycling a viable alternative.

09 - AUCKLAND

2011 ranking: 13 | 2010 ranking: 20

What a difference a Rugby World Cup and a new political structure makes. Aucklanders went all out for last year’s World Cup, embracing two new entertainment precincts close to downtown and tackling its inadequate public transport with a raft of initiatives. Fireworks and parties aside, the city’s citizens have been shown just how good their city can be. Mayor Brown and his council have just approved the first Auckland Plan, which maps out the city’s development for the next 30 years. It calls for a more efficient and exciting Auckland, with a better connection to its waterfront and better urban design. It won’t be cheap – the transport initiatives alone run to $12bn (€7.2bn) – and Auckland must find other funding other than tapping ratepayers. We wait with bated breath to see what the next year brings.

Population: 1.5 million.
International flights: 47 destinations, of which 22 are intercontinental.
Education: there are 541 schools, the overwhelming majority of them are state; 17 per cent of the population aged over 20 has a bachelor’s degree or higher.
Sunshine: annual average, 2,050 hours.
Temperatures: average high in January, 23c; average low in July, 8c.
Tolerance: Auckland is one of the most multicultural cities in the world – in Maungakiekie/Tamaki 38 per cent of the population was born outside New Zealand.
Drinking and shopping: about 25 new bars and restaurants opened in Auckland last year.
Cycling: 12,970 cyclists in the city.
Unemployment rate: 7.9 per cent.
Green space: 83,164 hectares of open space in the Auckland region, 17 per cent of the land mass.
How easy is it to start a business? Easy and fast; about 2,500 startups here every year.
Key developments: a new ferry terminal in the upper harbour that will link Hobsonville and Beach Haven (two upper-harbour suburbs) with downtown by mid-2013. ameti, a multi-million new busway in the east of the city, starts construction this year.
Monocle fixes: it’s about time the rail tunnel under the cbd is built. Auckland needs to sort out its taxis – the industry is largely unregulated and they’re expensive.

10 - STOCKHOLM

2011 ranking: 11 | 2010 ranking: 06

With Sweden coping better than most others with the economic crises, Stockholm is as buoyant as ever. New restaurants are opened almost weekly, the cutting-edge fashion scene is churning out new collections and interesting architectural projects, such as the Gärdet housing block by big, are underway.

Stockholm offers great quality of life for a reasonable price, with a good Scandinavian welfare society model, education and healthcare. Stockholmers are also active when it comes to enhancing life. The Skafferiet food forum, a private initiative where food and the politics around it are discussed every month, is one example; the new urban garden on an abandoned railway track in Södermalm another. What the capital could work on is integrating its many immigrants.

Population: 861,000 in the city; 2 million in the metropolitan area.
International flights: 80 destinations, of which 11 are intercontinental.
Crime: murders, 22; break-ins, 3,001.
Education: 53 per cent of the population have a higher education degree.
Healthcare: the city recently announced a sek28bn (€3.1bn) investment in healthcare.
Sunshine: annual average, 1,821 hours.
Unemployment rate: 5.8 per cent.
Electric car charging points: around 60.
Tolerance: 28.7 per cent of the inhabitants have a foreign background. Gay marriage is legal.
Culture: 100 museums; 44 art galleries; 17 theatres and 19 cinemas.
Bookstores: chains, 36; independent, 9.
Outdoor pools/spas: pools, 2; gyms, 70 (the main chains) and spas, 14.
Green space: 40 per cent of the city.
Key developments: the New Karolinska Solna university hospital is set to open in 2016; it will provide specialised healthcare in close collaboration with education and research. The planned Royal Seaport major urban development project will include 10,000 homes and 30,000 workspaces. Citybanan, a 6km railway tunnel for commuter trains, linking southern and northern Stockholm is due to be completed by 2017.
Monocle fixes: Stockholm could use more independent bookstores and newsagents as well as cheaper public transport.

11 - KYOTO

2011 ranking: 21 | 2010 ranking: 23

With its 1,200-year history, the most beautiful temples and gardens in Asia and 40 million visitors a year, Kyoto could be forgiven for a bit of complacency. But the rich heritage exists within a modern metropolis, which is a thriving industrial and academic centre, with its own style in everything from food to architecture. Some of Japan’s biggest companies – including Kyocera and Nintendo – have their base here. Quality of life is important to the citizens, who are rightly proud of the city’s distinct identity. The Kamo River, which runs through the centre of the city, underlines the sense of natural beauty which is reflected in the art and exquisite crafts. The city has its own compact subway and is well connected to the rest of Japan and beyond by rail (two hours from Tokyo; 30 minutes from Osaka) and air.

Population: 1.47 million (city); prefecture: 2.6 million.
International flights: 54 destinations, of which 19 are intercontinental.
Crime: murders, 18; domestic break-ins, 416.
Emergency services: average police response time: 5 minutes.
Education: 66 per cent of pupils graduating from high school went on to university in 2011 – the highest rate in Japan in the past 12 years.
Temperatures: average high in August, 33.6c; average low in January, minus 0.7c.
Sunshine: annual average, 1,770 hours.
Electric car charging points: 129 chargers at 94 points across the city.
Unemployment rate: 4.8 per cent, down from 5.6 per cent last year.
Culture: 11 theatres, 81 art galleries and 203 museums.
Bookshops: 291.
How easy is it to start a business? It takes roughly one week to start one but at least one of the founders has to live in Japan.
Key developments: voted in March, the City Planning Master Plan aims to connect each district via eco-friendly public transport by 2025. The local government plans to make Kyoto a pedestrian-friendly city, centred around busy Shijo Street, by 2020.
Monocle fixes: Kyoto is a year-round celebration of the seasons but the city centre could do with more green spaces beyond its beautiful temples.

12 - FUKUOKA

2011 ranking: 16 | 2010 ranking: 14

Fukuoka is a model of urban renewal. Its €3.7m facelift of central Kego Park will reopen in November. The city has plenty to boast about: world-class shopping and cuisine, mountains and nearby beaches. And thanks to the new bullet train and air links to other Asian cities, Fukuoka is a tourism dynamo.

Yet Fukuoka still needs some improvements. Its jobless rate hovers above the national average. It has been overly cautious in making its streets more bicycle-friendly. And its airport has flights to just 20 international destinations. City Hall isn’t sitting idle: it has taken the unusual step of forming a joint division with Busan in South Korea to explore commercial and tourism opportunities. The move is well-timed, as the city looks to lure visitors to the Fukuoka Asian Art Triennale in 2014.

Population: 1.48 million (city); prefecture: 2.4 million.
International flights: 20 destinations, of which two are intercontinental.
Crime: murders, 9; domestic break-ins, 1,153.
State education: Fukuoka city has 14 universities and 9 colleges; 53.3 per cent of high school students went on to university in 2011.
Sunshine: annual average, 1,819 hours.
Temperatures: average high in August, 33.1c; average low in January, 1.1c.
Medical care: 352.4 doctors per 100,000 citizens; 7.9 hospitals per 100,000 citizens.
Unemployment rate: 5.7 per cent (prefecture); national average: 4.5 per cent.
Electric car charging points: 57 chargers at 48 points.
Culture: 8 cinemas, 39 museums, 50 galleries and 60 theatres.
Outdoor pools: 4
Green space: 55 per cent of the city is covered in green space and it is surrounded by mountains.
Drinking and shopping: most supermarkets are open seven days a week until 21.00; Fukuoka is known as a Japanese food capital.
Bookstores: there are 567 bookshops in the city, including major chains such as Tsutaya.
Key developments: the city highway’s 60km expansion is due this summer.
Monocle fixes: Fukuoka’s experiment with bicycle-only lanes is a good start. A citywide bicycle-sharing programme could add to the city’s cycle-friendly image.

13 - HONG KONG

2011 ranking: 17 | 2010 ranking: not ranked

After years of pushing the commerce agenda, Hong Kong is now stepping up its culture game and scoring points for making life here just a bit more interesting in the process. Now the world’s third-largest auction centre after New York and London, the city has taken the role of Asia’s leading art hub.

With the expansion of the art fair under the ownership of Art Basel and with the museum M+ due to open its doors in 2017, Hong Kong is fast becoming a contender on the global culture stage.

Propped up by the banking, tax and transport infrastructure (a third runway at Chek Lap Kok Airport is in the works too) that made this city on the South China Sea a de facto regional business centre, Hong Kong’s got nothing to lose going forward. Next up: dealing with the perennial pollution problem.

Population: 7.1 million.
International flights: 160 destinations, of which 70 are intercontinental.
Crime: murders, 17; domestic break-ins, 4,382.
Education: 17 higher education institutions; 19.6 per cent of people over 15 have post-secondary qualifications.
Sunshine: annual average, 1,978.5 hours.
Temperatures: average high in August, 29.5c; average low in January, 13.7c.
Unemployment rate: 3.4 per cent.
Culture: 14 open-air theatres, 14 museums, €2.2bn endowment for the West Kowloon Cultural District project.
Access to nature: 41 beaches, 26 parks and more than 1,500 gardens, seating areas or small parks.
Green space: roughly 74,000 hectares of woodland, shrubland and grassland accounting for two-thirds of the total area.
How easy is it to start a business? Hong Kong ranks second out of 183 economies in the World Bank’s Ease of Doing Business rankings – it takes just three days to start a new business.
Key developments: Hong Kong-Shenzhen-Guangzhou express rail link targeted to be completed 2015 and the €3bn Hong Kong-Zhuhai-Macao bridge is due in 2016.
Monocle fixes: pollution remains a problem: continuous economic growth in the Pearl River Delta has countered the city’s efforts to reduce emissions. Hong Kong needs to become more bike-friendly.

14 - PARIS

2011 ranking: 12 | 2010 ranking: 07

Luscious gardens, picture-perfect streets, charming cafés and indie boutiques – Paris has undeniable lifestyle appeal. With the presidential election in May, France’s capital has been on the international radar recently and mayor Bertrand Delanoë, now in his second term, has made sure his city doesn’t disappoint. The Autolib’ system, a car version of the bike-sharing Vélib’, has enjoyed great success since its launch in 2011 with 1,740 electric cars located conveniently all over the city. To add to the capital’s unique culture scene, Palais de Tokyo reopened in April after a €20m refurbishment to become the largest contemporary art gallery in Europe. However, racial tensions continue to be an issue, particularly in the banlieues. And it’s about time for the city to reconsider opening hours as most restaurants and retailers are closed on Sundays.

Population: 2.23 million.
International flights: 399 destinations, of which 210 are intercontinental.
Sunshine: annual average, 1,679 hours.
Temperatures: average high in July, 25c; average low in January, 0c.
Tolerance: New president François Hollande has committed himself to fully legalising gay marriage by 2013.
Drinking and shopping: supermarkets tend to be open from 09.00 to 22.00 and most cafés and bars will serve until 02.00. However, shops and restaurants are usually closed on Sunday.
Public transport: Autolib’, the car version of the bike-sharing Vélib’, has 1,740 electric cars in the city, the price is €14/hour.
Cycling: 3.5 per cent of commuters cycle to work.
Unemployment rate: 8.3 per cent.
Electric car charging points: 1,100 charging Autolib’ points.
Public pools: 31, of which 7 are outdoors.
Green space: ranging from the Jardin du Luxembourg to the impressive Jardin des Plantes, greenery dominates Paris. As per the mayor’s order, no pesticides are employed in the city’s parks.
Key developments: the vast regeneration of the 18th arrondissement. The central focus is the 5,000 sq m Zac Pajol office space using only carbon neutral and sustainable materials.
Monocle fixes: better opening hours and less traffic in the city centre.

15 - SINGAPORE

2011 ranking: 15 | 2010 ranking: 21

Singapore ticks all the boxes for the good life; it’s green, clean and efficient. Called the Garden City, Singapore has 66 sq m green space per person compared to the global average of 39. Its vibrant food culture, which fuses the cuisines of its nationalities (Chinese, Malay, Indian, Indonesian), is matchless. Changi continues to top the international airport league tables. In addition, Singapore takes first spot on the World Bank’s 2012 Ease of Doing Business ranking.

In stark contrast, the city-state has one of the world’s widest wealth gaps and a tightly controlled media. Political liberalisation seems a distant way off. And, there’s the skyline, which now has the unusually shaped and incongruous casino development Marina Bay Sands. Singapore may want to think hard about where it’s heading next.

Population: 5.1 million.
International flights: 228 destinations, of which 119 are intercontinental.
Crime: murders, 16; domestic break-ins, 705.
Education: ranked 40th best university in the world, the National University of Singapore has been working with Yale to establish Singapore’s first liberal arts college set to open next year.
Tolerance: Singapore’s Women’s Charter is regarded as among the most progressive in the world. However, with the defeat of Lim Hwee Hwa, there are currently no women ministers in the cabinet.
Media: all the major local newspapers, tv channels and radio stations are run by state-affiliated companies.
Temperatures: average high in April, 32c; average low in February, 24c.
Public transport: plans to double the suburban rail network by the decade’s end.
Unemployment rate: 2.1 per cent.
Electric car charging points: 6.
Culture: the government has invested S$6m (€3.7m) in the 2011 Singapore Biennale and has committed to an annual spending of S$365m into arts until 2015.
How easy is it to start a business? It takes only a day to register a company.
Key developments: the Marina Bay Financial Center: three office towers, a mall and two residential blocks in the financial district.
Monocle fixes: better public transport to meet the rapid rise in population.

16 - HAMBURG

2011 ranking: 22 | 2010 ranking: 24

Water, water, everywhere: one of Hamburg’s greatest assets increasingly takes centre stage, as its HafenCity harbour building project (which will ultimately expand the city centre by about 40 per cent) edges closer to completion. Last year, the Spiegel group and Germanischer Lloyd moved into their new headquarters here, and other major projects such as the HafenCity University are slated to open within the next two years.

At the same time, Hamburg is taking important steps to upgrade less glamourous districts, like Wilhelmsburg, a lower-income, culturally mixed area on an island in the Elbe river. Hamburg prides itself on being media-savvy, reserved, wealthy, very pretty and traditional, but it’s taking solid steps toward the future and including everyone. Impressive.

Population: 1.7 million in the city; 4.3 million in the greater metropolitan area.
International flights: 115 destinations, of which six are intercontinental.
Crime: murders, 12; domestic break-ins, 6,482.
State education: 88,233 students studying at 20 higher education institutions funded by the state and 10 private ones.
Sunshine: annual average, 1,601 hours.
Temperatures: average high in July, 21c; average low in January, minus 2c.
Drinking and shopping: shops are allowed to be open around the clock from Monday to Saturday but generally close at 19.00. Everything is closed on Sundays.
Public transport: it’s wonderful – in addition to the S-Bahn, U-Bahn and buses, there is a fleet of ferries that carry passengers along the Elbe to the suburbs and the southern districts of the city.
Unemployment rate: 7.7 per cent.
Electric car charging points: 27
Culture: as the saying goes, Hamburg has “40 theatres, 60 museums and 100 clubs”.
How easy is it to start a business?/ With 122 new businesses started per 10,000 inhabitants in 2011, Hamburg is behind only Berlin within Germany.
Key developments: a subway extension, many more office buildings and hotels are underway.
Monocle fixes: more lower-income housing and student breaks would be welcome.

17 - HONOLULU

2011 ranking: 19 | 2010 ranking: 13

One of the most popular tourist destinations in the US, Honolulu offers more than sea and sun to its nearly 1 million residents. This spring, ground was broken on the Honolulu Rail Transit system, the Hawaiian archipelago’s first rail line. The route will not only provide a quick link between the city’s international airport and its downtown but also provide an alternative for commuters heading into Honolulu along some of the most congested highways in the US.

Having imported up to 90 per cent of its food over the past few decades, the city is reversing this by investing in local farming. From urban rooftop garden solutions to organic farms that employ the local community, Honolulu now hosts farmers’ markets daily offering its residents food that’s as untouched as Oahu’s 21 state parks.

Population: 337,256 in the city; Honolulu county, 953,207.
International flights: 79
Crime: murders, 19; break-ins, 5,760.
State education: 31.1 per cent of the residents have a college degree.
Sunshine: annual average, 3,041 hours.
Temperatures: average high in August, 32c, average low in February, 19c.
Drinking: bars in Honolulu close at 02.00.
Unemployment rate: 5.7 per cent.
Electric car charging points: Hawaii has the highest number of ev charging points per capita in the US – 200 units in total, one for every 5,500 residents.
Culture: 15 cinemas. Honolulu’s main theatre complex, the Hawaii Theatre Center, is celebrating its 90th anniversary this year.
Bookstores: 16, 11 of which are independent.
Green space: about 75 per cent of Honolulu is covered in parks, trees and greenery.
Key developments: when finished in 2019 (first section from Kapolei to Aloha Stadium is slated to begin operation in 2015) the Honolulu Rail Transit Project, a 32km elevated rail line featuring 21 stations, will connect West Oahu with the Honolulu International Airport through downtown Honolulu.
Monocle fixes: Honolulu needs more affordable housing, it ranks among the US’s most expensive cities. It also needs to get its fiscal house in order – with the hart project in place, the city’s general bond obligation debt could double to $4.6bn by 2018.

18 - BERLIN

2011 ranking: 08 | 2010 ranking: 11

Will Berlin ever become a real cosmopolitan capital? The long-awaited opening of the Berlin-Brandenburg airport, scheduled for early June, was postponed until March 2013 on ridiculously short notice, the city opera’s renovations are also running a year late, intra-city public transport is still unreliable, and the long-discussed Humboldt Forum castle project remains a huge field.

At the same time, major real-estate projects, such as the Bikini House or Zoofenster, are waking up the city’s western districts and entrepreneurs have established a strong start-up digital culture that locals refer to as “Silicon Allee”. Berlin has come to a point in which its identity as a capital city needs to solidify. What was once Berlin’s usp – that of being poor, bohemian and sexy – just doesn’t cut it anymore.

Population: 3.4 million.
International flights: 172 destinations, of which 36 are intercontinental.
Crime: murders, 23; domestic break-ins, 12,918.
Education: in the winter term 2011-2012, there were 152,582 university students in Berlin, by 3.8 per cent higher than in the year before.
Tolerance: 14 per cent (478,212) of Berliners have a foreign passport – but while more central neighborhoods are increasingly culturally mixed, racist incidents still occasionally occur.
Sunshine: annual average, 1,142 hours.
Temperatures: average high, 28c; average low, minus 3.1c.
Shopping: the vast majority of shops are open till 20.00. Most big supermarkets close at 22.00 or 23.00 but the “spätkauf” (“late buy”) shops will provide for your basic needs.
Cycling: it is estimated that Berlin has 710 bicycles per 1,000 residents. 500,000 daily bike riders account for 13.1 per cent of total traffic.
Unemployment rate: 12.9 per cent.
Electric car charging points: 96.
Culture: more than 170 museums, around 450 art galleries and 266 cinema screens.
Green space: 18.3 per cent of the city.
Key developments: West Berlin’s old city centre is blossoming with new projects, including the high-rise Zoofenster, opening with a Waldorf Astoria this autumn.
Monocle fixes: crime is up in Berlin. Perhaps there needs to be citizen initiatives to complement increased police presence.

19 - VANCOUVER

2011 ranking: 20 | 2010 ranking: 16

The dust has settled since Vancouver’s “hockey riots” last June and the city is back to its outdoor lifestyle. With a thriving new crop of independent businesses, from Gastown cafés to booming tech companies, people are immigrating for more than just the view.

The question is, will they be able to afford a home there? This year Vancouver earned the distinction of the most expensive city in North America. The housing situation is so dire that the city has launched a competition open to the public offering cash prizes for the best housing solutions.

They’re doing better on the transport side, pouring money into building cycle lanes and bus usage is on the rise.

Such an active city is desirable; let’s hope the high prices don’t mean that only a few can enjoy it.

Population: 603,502 city in the city, greater metropolitan area, 2.4 million.
International flights: 75
Crime: murders, 15; domestic break-ins, 2,726.
Education: The University of British Columbia consistently appears among the world’s top 30 institutions in the Times Higher Education ranking.
Temperatures: average high, 21.9c; average low, 0.5c.
Tolerance: British Columbia legalised gay marriage in 2003. One quarter of Vancouver’s population speaks Chinese.
Drinking and shopping: grocery stores are open 07.00–23.00, bars close at 04.00.
Public transport: bus ticket, $2.50; SkyTrain ticket, $2.50. The automated SkyTrain system operates three lines and serves the airport.
Cycling: 15.9 per cent of residents cycle or walk to work.
Unemployment rate: 7.3 per cent.
Electric car charging points: 67 will be installed by end of 2013.
Outdoor pools: 5.
Green space: 200 parks in the city.
Key developments: 21,865 residential units and 11.41m sq ft of commercial space in development. Danish architect Bjarke Ingels has landed a skyskraper commission on a triangular site next to the Granville Bridge.
Monocle fixes: Vancouver needs more affordable housing.

20 - MADRID

2011 ranking: 10 | 2010 ranking: 10

There is no doubt that the financial crisis gripping Spain has prompted Madrid’s slide in ranking this year. With high unemployment, rising prices and a raft of budget cuts, the city’s decade-long reformation has come to a grinding halt. But while new mayor Ana Botella may have depleted cash reserves, the age of austerity is yet to affect Madrileños’ penchant for a good time.

If anything, Madrid’s buzzing streets are a shining example of how to live out a crisis. In the past few years, city council money has been well spent – a rejuvenated city river, a beautified high street – but perhaps authorities should use the respite in grandiose city developments to iron out the crinkles.

Improving customer service and air quality and encouraging the retail sector to stay open during the siesta would be a good start.

Population: 3.2 million in the city, greater metropolitan area, 5.3 million.
International flights: 154 destinations, of which 72 are intercontinental.
Crime: 48 murders.
Education: Madrid is home to seven public and nine private universities, there are 308,546 university students, 83 per cent of which are in state education.
Sunshine: annual average, 2,787 hours.
Drinking and shopping: bars usually close at 02.30-03.00. Some of the city’s main food markets close at 01.00.
Cycling: The MyBici bike hire scheme is on hold because of cost-cutting measures.
Unemployment rate: 18.65 per cent.
Electric car charging points: 41.
Bookstores: 540.
Outdoor pools: 505 public outdoor pools.
Green space: 18,15 sq m per person.
How easy is it to start a business? At the end of 2011, it took 47 days to start a business. Mayor Botella has just announced a plan to reduce this to zero, eliminating procedures and red-tape.
Key developments: works are about to begin on one of the city’s most important markets in La Latina, plus eurovegas casino is slated for the outskirts and could have a transformative effect on the city’s tourism and economy.
Monocle fixes: reconsider the siesta: it doesn’t make sense for retail outlets to close when customers are out on their lunch break. During an economic crisis businesses need to adapt.

21 - BARCELONA

2011 ranking: 14 | 2010 ranking: 17

With less-heartening economic data in the Catalonian capital, the city authorities are also feeling the pinch. This has failed to curb an ambitious redevelopment agenda. The ambitious bz Innovació r&d complex and the long-term plan to attract manufacturing back to the cbd are emblematic of Barcelona’s innate urge to modernise, but planning authorities need to be conscious that too much change, too quickly, could supersede the history and character.

The long-awaited par-bcn high-speed rail link opens this year. However, on another note, the regional government’s implementation of the Catalan language is causing exclusion.

22 - PORTLAND

2011 ranking: 18 | 2010 ranking: 22

The US Northwest’s micro-metropolis shines itself up for a new era. Some dignitary is always in town (the mayor of Bogotà just paid a call) to inspect the tough laws against sprawl or expanding transit system. (This year, the latter sees construction of the first major US bridge reserved for light-rail, pedestrians and cyclists.)

Portland elects a new mayor this year. Whoever gets the job must steer a proposed $600m cycling improvement scheme and hope to harness entrepreneurial zeal – record numbers of small-business licences have been taken in recent years – to redress perennially high unemployment.

23 - SAN FRANCISCO

2011 & 2010 ranking: not ranked

San Francisco has continued to solidify its status as the world’s technology hub. The city used tax breaks to persuade Twitter to move into the seedy Mid-Market district, heralding a broader revitalisation of the area, while Apple is planning a doughnut-shaped hq. The influx of tech money – many of Facebook’s 3,500 employees became overnight millionaires after its spring ipo – has caused the property market to skyrocket. Estate agents say it’s not unusual for there to be many offers on a property above the asking price. However painful this may be for non-techies, there are upsides. The city has one of the best food scenes in the US; imminent openings include The Mill on lower Divisadero Street, which will anchor the neighbourhood. And the America’s Cup comes to San Francisco in the summer.

24 - MONTREAL

2011 ranking: 03 | 2010 ranking: 02

Consistently ranking among the best cities in the world, Montréal however has been a slow or non-mover in our survey. It has a booming arts scene, affordable higher education, plenty of green areas, and an internationally diversified, out-going society – but it seems that lately the government has been neglecting the city’s full potential. Despite the ongoing major transport projects totalling ca$22.9bn (€17.7bn), and the bixi bike share system, Montréal remains desperate for better roads and infrastructure, which has been long overdue. We do applaud, though, the Rosemont-Petite Patrie Borough’s commitment to increase its green space to fight the rise in urban temperatures. Twenty per cent of all new developments must be landscaped and the mayor’s eco focus has led to 21,057 cubic metres of new greenery in the district.

25 - GENEVA

2011 & 2010 ranking: not ranked

As a renowned hub for banking and multinationals, it’s not surprising that 40 per cent of Geneva’s residents are foreign and that the city’s 4 per cent unemployment is among the lowest in the western world. The city’s high costs have led to companies scaling back though. The government aims to reverse this trend with its Geneva 2020 programme. Plans include extending suburban public transport links and introducing an electric car sharing scheme with the addition of the Voie Verte that will stretch through the centre providing more green space. More immediate, however, is the need for affordable housing. This March saw a law passed that allows only 20 per cent of new developments as second homes, creating a more liquid rental market, and the beginning of an apartment-complex project in the Junction area.

Those that didn’t make the grade

Choosing our top 25 can be a tortuous task. Last year’s top cities obviously go in the mix, but there are always new contenders to consider, old favourites to reconsider and the occasional leftfield suggestion usually put forward after a glass or two of white wine on the terrace (to my dismay, Birmingham still fails to make it).

Several cities just missed out this year. Some for straight-forward reasons – Amsterdam is lively but it somehow seems slightly stuck and unsure if it should be liberal or more buttoned up. Others for more complicated reasons – Oslo may be the capital of one of Europe’s strongest economies but it just feels a bit, well, unexciting.

There are a handful of cities that may well make the grade next year. Minneapolis has a great mayor and a lot going on but isn’t quite as strong as the other American cities in the top 25. Dusseldorf and KÖln are both strong contenders but aren’t quite up to the standards of Munich, Hamburg or Berlin.

As ever, a couple of cities had to fall out to make way for our new entries (San Francisco and Geneva). Seattle has a beautiful setting, nestled between three mountain ranges, yet doesn’t have the soul of its neighbour Portland, while Lisbon, which has barley scraped into the top 25 for the past three years, is in the midst of a deep economic crisis. There is, of course, next year.

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