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At the start of a GC is Germany supposted to run into the negative for PPs? Even after Poland falls Germany is only getting about 23 net per turn. Is this correct?

Also it seems like there is not any downside to breaking the MR pact. So I must be missing something other than losing the extra Dip points. Seems like all that extra land area is well worth the cost.

You probably raise the Soviet war readiness and/or improve their social unrest by reneging on the MR pact.

Until you conquer France and the Low Countries, you'll be struggling for PPs.