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If you do face Mitteleuropa, do not cripple Germany; cripple her allies (and not Russia, since no one can invade friggin Russia). Instead, give Austria and the Sudeten to Germany, and turn her vassals into republics, but let Germany lose no land, lest they fall to fascism.
 
I say cripple Germany and divide Russia. When he conquers Russia, he should break it up into its constituent parts to ensure that they never rise to be a threat to him again. It is actually completely possible to take down Russia. I have done it twice, once as the United States in Doomsday and once as Germany. Germany should be divided up if possible to ensure the same thing. A united Germany has proven it is way to powerful.
 
I say cripple Germany and divide Russia. When he conquers Russia, he should break it up into its constituent parts to ensure that they never rise to be a threat to him again. It is actually completely possible to take down Russia. I have done it twice, once as the United States in Doomsday and once as Germany. Germany should be divided up if possible to ensure the same thing. A united Germany has proven it is way to powerful.

I say he should keep Germany and Russia together but instead remove the monarchist governments and replace them with democratic ones subservient to his own.
 
I still say only democratize Poland/Eastern buffers and maybe Russia, but leave Germany with all prewar territory intact and with the Hohenzollern Kaisers on the throne, perhaps with more democracy! For once, lets leave Germany alone? What did they do to America? America didn't even get involved in the Weltkrieg!
 
What did they do to America?

Germany is blamed by the Americans for their economic trouble because Germany cut them out of the world market after they won the Weltkrieg, leading to widespread hatred of Germany in America. I am also always a proponent of making sure my enemies can never become a threat again, which dividing Germany and Russia might help ensure. Also, puppet regimes can be overthrown, resulting in a bitter enemy. A reunification is much less likely and would give you a chance to react before the reunification is complete
 
@everyone: Wow, lots of speculation on what to have happen with Mitteleruopa!

All I can say right now is that it is maybe too early to talk about what to do with them. Remember, I still have to finish off whats left of the Internationale, and then figure out what to do with the French and the Italians post war. Then there is the question of what to do with the Japanese and their allies in Asia. (such as, how should I start a war with them.....)

@everyone:thanks for your comments!

With the ground war in Europe set to intensify, the US government begins to further expand the US army, ordering the formation of brand new mechanized and infantry combat corps.
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Japan annexes the Philippines.
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American forces launch an assault across the Franco-Spanish border, with their target being the city of Perpignan. Here, the US army meets extremely ferocious resistance, by 180,000 heavily armed and very well trained French soldiers with armoured support. US forces suffer very large casualties before falling back to their original start positions.
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US warships scout out Italian coastal defenses. What they find is shocking: The Italian people's army has turned every beach on the peninsula into a fortress. Hundreds of thousands of Italian troops line Italy's beaches, which have been turned into a network of bunkers, tank traps, shore batteries, sea walls, and land mines.
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The Dutch government in the East Indies surrenders to Australasia and Japan, who carve up the area between them.
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Far to the east, French troops march into Budapest, Hungary, forcing the Hungarian government to relocate outside of Transylvania. American commanders are apparently confused at the French war strategy, with French forces marching further into Mitteleuropan territory even though their southern border is vulnerable to US attacks.
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US forces launch a large scale offensive in the Pyrenees mountains, with the goal of completely overrunning the French border. Although the attacks in the center and east go well, at Dax, French infantry, armed with assault rifles, hand held anti-tank rockets, and backed up with lots of heavy artillery, are able to completely shatter a massive attack by hundreds of American medium and heavy tanks.
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The fighting for the border continues to become more and more intense, as 28 French divisions launch a massive counterattack against General Eisenhower's army, who is unable to hold position, fleeing back into Spain.
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With the battles around the Pyrenees mountains turning into a complete bloodbath, US commanders begin to think of ways to taking some of the pressure off of the US forces in Spain. Deciding that the best option is to open another front, US forces are ordered to mass in Plymouth, in occupied England. These troops include another reinforcement package from North America, consisting of many hundreds of Sherman tanks.
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I am sensing a D-Day invasion is in the not to distant future.
 
A quite different D-Day is at hand I think. Different as you probably can't expect much cooperation from the local populace this time...;)
 
A second front is the only way to get rid of the French commune.
Land in Normandy, and then straight to Paris, you'll take a good chunk of their IC.
By the way why the French tanks are so outdated?
 
The growing power of Japan gives me an idea: after the Syndicalists are defeated, why not give Germany and Russia time to consolidate and rebuild while you take on the Japanese Co-Prosperity Sphere in the Far East? You've got a hell of a navy underway, and lots of experienced troops would make short work of Japan and Australasia's island holdings. This would keep the AAR interesting while allowing Germany and Russia a fighting chance to sort themselves out after the war - and indeed could work with the 'story' of the AAR, where for example the USA and Germany clash over the 'temporary settlement' regarding the end of the war and the territory of Europe - Garner could take a hard line stance and say that no land would be given back to a harsh monarchy like Germany, forcing the Germans to make plans to prevent US hegemony in Europe.

...a Cold War that turns hot through the states of East and West France, anyone?

EDIT: speaking of France, presumably as an Entente member you'll be wanting to give National France control of Metropolitan France once the war's over. With this in mind, could you get away with military-controlling them and using their troops to support your invasion of France? It would make a lot of sense within the story - what are their troops doing right now, anyway?
 
@serutan: That is actually a bit of oversight on my part.:D In HOI2, I have always had a tendency to put more resources into building up the army or the navy, at the expense of the poor airforce, which I usually make large and strong enough to just maintain air superiority and do a little bombing. However, expect to see the USAAF get a lot more priority when war breaks out in the pacific.

@Nikolai: Yeah. Instead of getting greeted with wine and kisses, it will be with gunshots and the middle finger. Well, at least from the hardcore Syndicalist French, there are probably some French civilians who don't like the Syndicalist regime.

@Karaiskandar: To tell you the truth, I have no idea why the French did not build more modern armoured divisions. I had programmed their AI to put quite some emphasis on armoured research. I was hoping I would at least see them using some S-35 tanks. Its kinda weird seeing those elite French 1945 infantry divisions being supported by 1930's light and medium tanks.

@Zhuge Liang: Exactly. The campaign for the Pyrenees is costing a lot in manpower and equipment for very few gains. Therefore, to get things going again, it is time to open yet another front.

@Meadow: Most of nationalist France's troops are garrisoning their coastlines, as well as guarding the borders with Mittelafrika and Libya. I could military control them, but I have enough troops in Europe right now to keep things going without any other assistance.

BTW, I do want to fight a big pacific war with the Japanese co-prosperity sphere, but I don't know how I can start one. Perhaps a 1945 pearl harbour attack?

US forces finally succeed in securing the Pyrenees mountains, with General Eisenhower succeeding in stopping another French counterattack.
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Meanwhile, to the north, large formations of American fighters and bombers begin to pound French positions in Normandy, Brittany, and even the city of Paris itself. The French people's airforce is helpless to stop these attacks, leaving many French divisions to be bombed into destruction.
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Finally, operation overlord, the cross channel invasion of France, is launched. 470,000 US troops, led by the US 2nd & 4th armies under Generals Marshall and Bradley, land on the coast of Brittany. With their armies tied up fighting both the US to the south and Mitteleuropa to the east, the landings take place with little to no resistance.
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As US troops breakout in all directions in Brittany, the French send whats left of the ex-British Republican Navy to intercept US shipping between occupied Britain and France. The only force standing in the way of this fleet is Admiral King's battleship task force, which, outnumbered, closes to gun range of the enemy carriers and battleships, and opens up with everything they have.
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Eventually, the weight of Syndicalist numbers and firepower forces King to withdraw to the channel ports. Officially, the battle is a defeat for the US navy, which loses a number of destroyers, as well as the veteran battleship USS Maryland. Unofficially however, the battle is a huge blow to the French Commune's navy, which loses a number of its irreplaceable British warships, which include a battlecruiser, a battleship, and two aircraft carriers. Heavily damaged, the syndicalist ships limp into the port of Cherbourg.
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On land, the fighting near the Brittany landing zone intensifies, as US forces, which attempt to cross the Loire River near Cholet, run into a large group of French reinforcements, which include a number of light and medium tanks. Despite their numerical advantage, US forces are unable to break through the tough French defenses on the southern banks of the river, forcing the drive on Cholet to be called off.
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US forces push French troops out of Cherbourg, forcing the battered ex British ships out of the port. to their horror, they find that the US navy, in the form of the brand new 3rd carrier task force commanded by Admiral Halsey, is waiting for them. The American carriers launch their planes in an effort to completely wipe out the battered ships, succeeding in sending one of the enemy battleships to the bottom of the channel. However, most of the enemy fleet escapes, due to a combination of successful evasive maneuvers, the coming of night, and smokescreens layed out by their destroyer escorts.
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With the redeployment of large amounts of French troops to contain the US landing in Brittany, US forces in the south along the Pyrenees mountains launch a massive offensive deep into southern France, sending French troops into complete disarray as American armoured and mechanized units move on the cities of Bordeaux and Toulouse.
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Considering you are invading from two directions and the Germans will only be coming from one and have to drive the French out of Germany itself first, my money is on you winning the race to conquer France.