The island of Crete was a valuable prize. The Germans wanted to deny Crete as airbases within striking distance of Rumania. Crete was also well-located to allow interfering with sea traffic to Malta and to North Africa.
Crete also seemed like an obvious location to use German airborne troops. On lesson learned was that the German airborne force was not a very effective fighting force. Instead German mountain troops were much more effective
Another issue was the rapid advance of a German mechanized force to the east. This force was under the command of General Rommel, who was an expert on infiltration as a means to break through and advance. Rommel learned the technique in the Alps against the Italians. Rommel was also an innovator in applying infiltration to mechanized warfare. Rommel was able to do some amazing things in North Africa against some rather mediocre British leadership.
Infiltration tactics were the greatest innovation to come out of the Great War. The concept was tested against the Russians with considerable success. It also was tried in Western Europe by the Germans, but the Americans also adopted the ideas, at least on a small scale. Sergeant York's exploits were the best example.
Rommel's success caused the the 7th Australian Division and the Polish Carpathian Brigade to be kept in North Africa rather than being sent to Greece.
This is based on the account in "Greece, Crete, and Syria" by Gavin Long.
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