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I wanted to bring up an issue I have with this decision. Mainly, it only triggering if London is in allied hands.

The historical background to this decision is that Yugoslavia was about to join the axis, with the allied coup stopping this. This can be seen by the two results of the decision. Now, why would this not happen if london was in axis hands? Instead of yugoslavia fighting you without need of a DOW, or they just joining you, they stay neutral?
It seems to me that it would be much more logical to either have them join the axis straight away when the other triggers are met, with the assumption that the UK is no longer in a position to support the coup, or to simply fire the even anyways, with the UK having to decide whether to spend its precious ressources on the coup or on the defense of the home island.

Any thoughts on the matter?

I think I'd be inclined to only have this happen if Yugoslavia has a pro-Axis leaning. It starts at 45% pro-Axis, which means that significant Allied diplomacy, or bad Axis play (I mean by that invading neutrals they didn't historically invade) would be required to prevent this happening.

Hopefully that sounds reasonable and not exploitable?

This would make Sea Lion a slightly more Axis attractive option too.

you have to choosse between lion operation or yugos by diplo or invest

Yeah I agree a pro-axis leaning should be required. I dont think it can be exploited, but if someone else wants to weigh please do.

Do you think the UK should still be given the option for a coup? With sealion going on, quite successfully if London falls, the coup might find much less support. Perhaps, if london is fallen, it should only have a chance to succeed?

I have a special place in my heart for this country, Yugoslavia. I agree, the British "couping around" while their own country is failing domestically seems inappropriate. I suggest giving it a <90% British Morale/London is in Axis hands modifier (or something like that) to make the event not trigger. Eventually, the strategy guide might have to illuminate these subtleties of Decision Events not firing and point out specific strategies advantages and disadvantages. I for one would like to see a hit list of what you need to do to successfully occupy all of france and then trigger Spain joining the axis for the points.