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I'm on my third XCOM campaign (normal difficulty) in an attempt to keep any countries from quitting the coalition and it is very clearly not working. My troops are strong enough to handle the early missions, but since there's no way to handle abductions in three places at once, on average this results in six additional points of panic.

Is there a strategy that keeps all sixteen countries in the coalition? Is there a maximum difficulty level on which it will work?

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I found it rather easy on normal difficulty.

Keep in mind that after you assault alien base you get 2 panic reduction worldwide.

Build more satellites and satellite control facilities. This is extremely important.

Deploy satellites either 4 days before end of month or in countries that are about to leave the council.

Always go to special missions, these give panic reduction in specific countries.

On classic difficulty it is more difficult though as you have less spare resources for satellites.

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    Note you don't have to deploy 4 days before EoM to save a fully-panicked country, the panic is reduced immediately after launch. I finished building a satellite literally 1 hour before my council report on the final day, and I was able to launch it and save the panicked country.
    – Tim
    Nov 6, 2012 at 22:11

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