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The Winter War - The Defeat
In early December, the defenders of Kajaani were routed, and the three divisions were falling back, badly mauled. Mannerheim's orders to hold at all cost probably bought Finland a few extra weeks of life, but at a severe cost - the divisions were now at about 1/4 strength each, and in no condition to do anything but to retreat and sit out the rest of the war.
As the Finns retreated, it was obvious that STAVKA was planning on a lightning attack through Finland to force the Finns (who were still holding strong in other parts of the front) to weaken their positions elsewhere and to try and halt the advance. Luckily for the defenders, their recent "mad dash North" had at least the Swedish volunteers ready to counterattack into Kajaani from Kuopio, with two divisions from Murmansk advancing from the North. The three divisions holding Joensuu provided covering fire and artillery support. For now, the Soviet Armored and Motorized divisions which were planning to blitz through down to Central Finland were contained.

This temporary success proved to be too little to late. Massive reinforcements were spotted approaching Kajaani from Petrozavodsk and by January Stalin's troops breached the line not only in Kajaani, but also in Joensuu and were threatening to cut the small Nordic country in two.
Mannerheim decided that the situation was beyond salvation and gave the green light to begin negotiating with the Soviet Union. Luckily, the defense his men put up was fierce enough to dissuade Moscow from trying to capture the whole of Finland, and to only demand the same territorial concessions it did before the war. Thus, on 15 January 1940, the Moscow Peace Treaty was signed.
Despite German efforts to prevent aid from reaching Finland during the war, and ignoring Finnish calls for help, Helsinki now slowly began turning towards Berlin, and contemplating ways to reclaim its lost territory...
