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It's a reported bug, but sadly not fixed as yet.
 
The root of the problem is that changes to the AI make it more likely to disband unneeded armies. However, when it suddenly realizes it needs an army, it rebuilds it. This leads to a vicious cycle for medium-sized nations for some reason.

(Answering your original question of why it happens)
 
it was probably introduced to stop the ai from bankrupting itself when it had to large armies (and navies), so i would think it was a good idea to start with, they just need to fine tune it
 
it was probably introduced to stop the ai from bankrupting itself when it had to large armies (and navies), so i would think it was a good idea to start with, they just need to fine tune it

It costs more to build armies from scratch than it does to turn the maintenance slider to 50%. The devs are so obsessed with making the AI put up a military challenge they forgot to give them the ability to take care of their country. The AI still builds loads of mercenaries, and at their cost means the AI will never have inflation under control. Mercenaries should be made cheaper to help the AI, and they definitely shouldn't be disbanding their armies following peace settlements. It costs too much to rebuild them.
 
I think it has done this in every version of EU3

No it hasnt, it started in one of the DW patches (or vanilla not 100% sure) but im 100% certain it wasnt an issue pre DW (at least ive never seen it).

Best way to reproduce it: Attack any country, make them your vassal, and watch them build and destroy armies again and again and again. I posted screen shots of this months ago but i was told screenies needed to be from vanilla version, which i sadly dont play.
 
It costs more to build armies from scratch than it does to turn the maintenance slider to 50%. The devs are so obsessed with making the AI put up a military challenge they forgot to give them the ability to take care of their country. The AI still builds loads of mercenaries, and at their cost means the AI will never have inflation under control. Mercenaries should be made cheaper to help the AI, and they definitely shouldn't be disbanding their armies following peace settlements. It costs too much to rebuild them.
i think it would be better to make the ai dislike mercs, otherwise we would be right back at my own NA exploit (the merc mega stack)
 
i think it would be better to make the ai dislike mercs, otherwise we would be right back at my own NA exploit (the merc mega stack)

Mercs are the only thing that can quickly bring the AI back on track after a major defeat, especially if the AI is fighting multiple enemies.
 
I had one ally who was doing that at some point. When I reloaded the game as them, I saw that they had loans. Maybe the culprit is that the AI disband units to save enough to repay the loan, but doesn't consider them when recruiting?
 
I had one ally who was doing that at some point. When I reloaded the game as them, I saw that they had loans. Maybe the culprit is that the AI disband units to save enough to repay the loan, but doesn't consider them when recruiting?

The AI doesn't know how to manage its finances. All it knows is it wants to kill you, and to do that it needs lots of army guys.
 
No it hasnt, it started in one of the DW patches (or vanilla not 100% sure) but im 100% certain it wasnt an issue pre DW (at least ive never seen it).

Best way to reproduce it: Attack any country, make them your vassal, and watch them build and destroy armies again and again and again. I posted screen shots of this months ago but i was told screenies needed to be from vanilla version, which i sadly dont play.

I just experienced exactly this. My medium-sized Vassal (i gave him some provinces to take care off) constantly builds, disbands, rebuilds armies. I tag-switched to them to see whats going on, and they have loans running. Sometimes they have many mercs, sometimes none.

As long as the country is not in war it is locked i this cycle. It even effects the fleet. Bad, bad. And i cant stop them from basically crippling themselfs. Just throwing all their MP and ducats away. And then when war comes they have low to no manpower and hardly and gold...

Are there any hotfixes out there?
 
Are there any hotfixes out there?

Making them much smaller (OPM) or much larger (over 3 provinces) will do. (and it is better not to drag them into wars too often)
 
Making them much smaller (OPM) or much larger (over 3 provinces) will do. (and it is better not to drag them into wars too often)

I force vassalized Pommerania in an early war, which was 3 provinces big at the time. I sold them Danzig later on but they still seem to build and disband their armies over and over. I hope they will stop doing it once Danzig cores for them, because it's pretty annoying to look at all the time. Fortunatly I'm in a non-aggressive alliance of PU's and vassals so I won't be in need of them having an army, but it would still be nice that they atleast kept something ready for when I might need them :p
 
More evidence we need 5.2.