The Council (LWR)
You receive funding from all council nations at the start of the game, regardless of whether you have satellite coverage or not. Their funding will increase if you give them satellite coverage. If a council nation receives too much panic it may leave the XCOM project and will cease funding you.
If all council nations leave the XCOM project the campaign will end.
Countries also occasionally make requests that, when filled, strenghten their defences in addition to offering immediate rewards.
Every month the council will have a special mission for XCOM. These can vary and are explained more in detail here: Council Missions
At the end of each month the council assigns a grade. This grade has no effect on the game but is a relative reflection of how a player is doing versus another campaign that will eventually pass the game.
Grades start out at C and, depending upon XCOM's success, can move up to A+ and down to F.
A grade of A+ means the player is likely to pass the campaign and is doing quite well. Conversely, a grade of F means the player is unlikely to pass the campaign and is doing quite poorly.
At the beginning of each month the council will hire new soldiers for XCOM (depending on difficulty) that take 18 days to arrive.
Requests and Country Defense
The council will make a request every 5-10 days. Most items can be requested, including items XCOM does not currently have and items XCOM has never seen. Harder to acquire items will usually be accompanied by more generous rewards, but not all offers are worth taking and not every time.
Each request fulfilled increases a country defense by 10 (as indicated with the little shield icon beside the country name in situation room). Countries with more defense are able to offer more generous rewards for fulfilling council request. Sometimes, if a country defense is high enough, the council nation will offer XCOM a donation to help in their efforts against the alien threat or will send its air force to assist in a UFO interception. As well, country defense reduces the amount of panic increase alien activity causes.
In summary, Country Defense has the following effects:
More likely to send interceptors to help engage UFOs More generous rewards for council requests Resistance to panic (A country has a Defense % chance to reduce panic from any source by half) Decrease the chance of a UFO scout mission succeeding (A country has a defense/2 % chance to cancel any successful UFO scout mission from sending a hunt mission)