Summary of Problem: The British army had been cut off from French forces and had fallen back on Dunkirk, hoping to be evacuated. The chances of rescuing 300,000 troops seemed low given German air superiority and the possibility of a German assault
Why was this a danger to Churchill/Britain? It was a possibility of loosing 300,000 men, would have possibly destroyed moral. Germany would get much closer to Britain if they had Dunkirk.
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