Coming from the AK Escapes Tunis thread...
From January 1942 the German General Staff begin to consider the invasion of Malta.
In Febuary Rommel and his CoS Westphal visit Hitler, pushing the prospect aimed at breaking the deadlock in the desert (interestingly, Auchinleck is in London at the same time talking about similar things).
In March the British War Office considers an invasion of Malta unlikely.
In contrast to this, in April Rommel renews his request and OKW appoint planning staff for an invasion, codenamed HERKULES. At this time things are getting tight in Malta, it being quite difficult to run the German air-sea gauntlet and bring supplies into the Grand Harbour. By the end of the month, the British Defence Committee is doubting the ability of the island to last until June. In late April, Hitler and Mussolini postpone HERKULES but planning continues, exercises are held and an invasion force is built up.
In June a tentative date is set for HERKULES, conditional on success of Rommel in the desert (who by this time had lost interest in Malta and returned his attention to Tobruk and the desert campaign). OTL Rommel is successful and HERKULES is cancelled.
There are two POD's: firstly that Rommel didn't lose interest in HERKULES and secondly that Rommel is bested in the desert and HERKULES goes ahead. Either can be used as the basis for the ATL.
Malta will fall. The British sense it and at this time the Germans are all over the air and sea. Yes, lots of fallschirmjaeger die, although the lessons of Crete are taken on board. The seaborne landings are a mess but progress is made. Naval and air attacks make defense untenable and Malta surrenders.
The fall of Malta is right on the cusp of the string of German defeats that spell the beginning of the end for the German war effort. Removing the Maltese thorn doesn't mean that the war is changed forever: if Rommel continues with his private war in the desert, then the two front pressure faced by Germany is exacerbated, Stalingrad plays out as OTL and Montgomery eventually defeats Rommel somewhere/anywhere in the desert.
However, WI Rommel obtains a brilliant victory before charging headlong at Egypt and is recalled. German expansion into NE Africa is slowed as cooler heads prevail and the Western Desert takes on a defensive aspect, a la OTL Italy, where the aim is to tie as many Allied forces up as possible. Eventually TORCH and Montgomery pinch the Germans out, but the result is a defensive victory for the Germans and the Allies now face Lysanders Sicily-Malta-Crete-Cyprus line. Meanwhile Rommel, and all the men and materiel not squandered on Africa, are free to develop the war in other areas (Russia, the Caucasus, even ex-Vichy Syria).
Croesus