Exactly.
And where the heck are the capitalists going to draw the line now? Piccadilly? What's left for them to fight for aside from the homelands of their own nations? It's not going to take much twisting to turn this into blatant cowardice, idiocy and incompetence (because it really is). The allies went from having near complete control of the world and effectively fencing in the communists with a nice long buffer zone only to give away the rest of Europe, all of the Middle East and probably Africa too without a fight. They've lost, plain and simple. The in,y way they can fight back now is with nukes, and that will destroy most of the land they were hoping to reclaim. Absolute best case scenario for them (well, actually it's the entire thing falling to internal division and strife but really, who can see that ever happening in the Soviet Union?

) is a hollow victory with half the world dead and destroyed and never coming back.
Idiots.
The Soviet Union is strong! It can't break down

But yes they have lost much territory indeed. However, to be fair, I think the situation for the western allies was quite.. disadvantageous from the get go. What strategic purpose do Norway play after all? None really, Sweden is taken already so it is just a matter of securing Narvik. It would be just overstretching Allied forces, but again it would be advantageous by stretching out Soviet forces. But I think the greatest issue is France in the end. With the communists having a powerbase in a western, and industrialized, European nation posing a major threat to England herself I believe it is kinda wise to retreat to protect what matter the most. As for Poland it was indeed a major "tripwire" of sorts in communist Europe, but I think that is what it was, an annoyance. A prolonged fight in a Poland would be difficult for the western Allies, but again it is much easier to fight out from Poland into Moscow than from crossing the English channel and all the way through France and Germany. So in a way I see why they were so passive, especially with the last world war very much fresh in memory. Also there is game limitations, I am sad to say that the first time Norway turned commie it was a civil war.. but alas a game crash... So after the peaceful communist takeover I reloaded the savefile two more times, but both were peaceful. So I settled with it.. Now, as you can see Norway did guarantee Bulgaria, who knows if the other allied nations didn't do it aswell? You'll find out soon enough.
And if the war turns nuclear, then I worry there are no workers to liberate for the communists, and no dictatorships to end for the democracies..
And speaking of finding out soon enough, next update should come out tommorow. Can't promise anything, but that is the plan!