That was precisely my thought, McLovin. I feel, at this point in time, Germany needs a method to produce warships in the Med. If one allows Italy to take S. France, this - essentially - means that Germany has to build a complex in Yugoslavia. This may be a good idea in the long run anyway, making it a little easier to reinforce the south against Russia. (OOB this could be a major complex, Alpha 2 I do not think it can.)
I feel an Airbase would be nice to accompany the complex in Yugoslavia, if you go this route, since then you can put 6 fighters in the air for cover air patrol. But again, if you have S. France, I think you would not need this. (Little harder since you have to build Italy in one zone and Germany in another instead of combined, but much cheaper.)