This is particularly in regard to Global, and the problems of defeated France. Just thrown this together, please point out any inconsistencies in the logic.
My suggestion for ANY power that loses its capital:
(Using France as an example)
The loser is considered to have signed an armistice, whereby:
The conquering power has right of transit through its territory, and can move forces into it The defeated power’s forces help defend their own territory, but cannot be used to attack.
All income goes to the victor.
No new units can be built by the loser.
French units in territories controlled by another Allied player remain Allied, and become controlled by that player. These “Free” units must either remain on Allied territory or be accompanied at all times by an Allied unit in order to retain this loyalty. If France is liberated they revert to French control.
In cases where Allied forces co-occupy a French territory, say UK forces in French West Africa, a battle occurs on the next turn of either player. The UK forces can retreat if able. (i.e. the UK cannot gain control of the territory simply by having one unit there, they must defeat “Vichy” units). A UK control marker must be placed until France is liberated.
Let’s examine this in the context of the USA landing in Southern Italy (I assume Rome is in this territory!)
Italy signs an armistice with the Allies.
Surviving Italian units remain on the board. They can defend against any attacks from Germany, co-operating with Allies (the USA player controls the Italian units in this case). All Allied units can pass through and into Italian territory.
The USA gets all income from Italian held areas.
On the Italian turn the only thing Italy does is fight battles against any German units in its territory. (I suggest the Germans in this case should have the option of retreating).
Italian units in German or Japanese held territory remain with the Axis and are controlled by the corresponding player until Italy is liberated.
If they become isolated from other Axis units, and are on Allied soil (i.e. after an unsuccessful attack) they immediately surrender and are treated as per defeated units.
No new Italian units are built (Italy is a defeated country, it does not become an active Allied power).
Italian ships remain where they are, and a naval battle will occur if Germany ships share the SZ. Again, they defend themselves but cannot attack, carry Allied fighters or transport Allied units.
OR if ships in port rules are used Italian ships must sail for an Allied port where they remain for the duration unless Rome is liberated.
If Italy is liberated, Italian units controlled by Germany or Japan revert to Italian control.
Notes: I do not allow players to use captured factories in any circumstances. The player forced into an armistice does NOT hand his cash over to the enemy. Since the victor gains, in effect, as many free units as the defeated player has left (though only in defence) the rewards are enough without the money-grab.
