Inspired by the post referring to a lack of a Berlin-Rome I starting thinking what would happen if Italy remained neutral for most of the war and then joined the allies. Mussolini after all did not join the war until France was basically defeated and it appeared that it was only a matter of time before Britain fell. So let's assume that Mussolini is like Franco and is neutral but friendly to the Germans while they're winning. Once it's assured that they're losing Italy throws in its lot with the allies. Below I have listed the effects of various countries or regions.
ITALY
Mussolini is anxious throughout the war but he remains on the sideline. Having exhausted resources in Ethiopia and the Spanish Civil War, Italy is able to rearm itself. Italy also does well economically by supplying material to both Germany as well as the allies. By late 1944 with the invasion of Normandy having taken place, Mussolini decides to make a move. He realizes that Italy must have a place among the great powers and with the allies an invasion of Austria is coordinated. Allied troops are sent to Northern Italy and Yugoslavia and invade. Though progress is slow, by January all of Austria, Czechoslovakia and most of Bavaria have been captured. Mussolini takes part at most of the major war conferences and he is seen as more important than De Gaulle and the Free French.
After the war Italy joins NATO and is given a permanent seat and veto power on the UN Security Council. I see Italy playing a very similar role to the one that France plays in the world in OTL. By that I mean that it will invest heavily in defence and try to be a global power. Italy will also be a nuclear power, using Fezzan in southern Libya as a site for nuclear tests. I actually see the Italians and French converging on many issues after the war and being allies. This is especially true once Algerian War begins in 1954. Since Germany isn’t divided in this TL there will not be as much need for the alliance between the Germans and French. Though possibly a three-way alliance will come to fruition. I see Italy being a founding member of the EEC too.
Oil is discovered in Libya in 1950 and becomes a major benefit to the economy of Southern Italy. Italian settlers are sent here and to Italian East Africa in huge numbers. Mussolini dies in 1954 of a stroke and is mourned by his people. A more moderate fascist replaces him and King Umberto II assumes more of the power for himself. The Egyptians are going to be fomenting Arab nationalism in Libya so Italy gets involved in the Suez crisis on the side of France, the United Kingdom and Israel. The Italians are at least able to secure passage rights through the canal. However, as the Arab states cut diplomatic ties with Italy in the 1960s due to their refusal to decolonize Libya and Somalia the Italians become very close to Israel. Low intensity guerilla warfare breaks in southern Ethiopia with the guerillas being based in Kenya. Sudan is turned into a puppet state of Italy. Because of this opposition to the Sudanese puppet government comes from Egypt. I believe Italy can probably contain the guerillas if it is an authoritarian state. In 1973 Italy aids the Israelis during the Yom Kippur War and is subject to an oil embargo. However, since Libya is Italian, it actually brings in billions of dollars in oil revenue for the Italians. For the rest of the 1970s the high price of oil continues and with it the economy grows and Italy will remain an authoritarian state. Perhaps in the 1980s or 1990s democracy comes to Italy.
THE BALKANS
Italy does not invade Greece, since Mussolini does not want to provoke the British. Without the invasion of Greece there is no invasion of Crete. This is significant because this was the first time the Germans attempted a mass invasion using paratroopers. Although successful there was a high casualty rate on the German side and this made the Germans wary of attempting an airborne invasion of Britain. Yugoslavia may or may not be invaded; I'm going to assume it doesn't. In this TL German troops don't need to go through Yugoslav territory to get to Greece and Yugoslavia. Also the pro-axis government may not be toppled. If Yugoslavia is not involved then neither is Bulgaria. Their main goal during the war was to annex Macedonia as well as Greek territory. Once the war is almost won, the Yugoslavs and Bulgarians throw in their lot with the allies. The Yugoslavs join shortly after the Italians once it is clear that Germany will lose the war. The Bulgarians want to keep Southern Dobruja (annexed from Romania in 1940) and have close links to the Italians. After the war I can foresee Yugoslavia breaking up if it does not have a strong authoritarian government like Tito's that respects all ethnicities equally. Only Romania goes Communist since it is the only country in the region occupied by the USSR after the war. After the war Yugoslavia joins NATO but Bulgaria does not, since it does not want to offend the USSR.
CENTRAL EUROPE
The allies launch an invasion of Germany (Austria) from the South once Italy joins the allies in 1944. In Hungary Miklos Horthy attempts to sue for peace with the allies and German troops are sent into the country. In this TL allied troops invade and are able to prop up Horthy. The Germans are using their troops in this region to fight off the allied invasion of Austria. The allies push up through to Czechoslovakia. At the end of the war allied troops are in Czechoslovakia and it therefore becomes a prosperous democracy and regains Ruthenia. Horthy remains leader of Hungary for a while after the war but this country too becomes a democracy. Austria does not become a neutral. This role goes to Hungary and Czechoslovakia perhaps.
GERMANY
Not having to waste resources and men in the Balkans, North Africa and Italy, the Germans are much more successful in their invasion of the Soviet Union. I assume that the Germans will invade at least one month earlier with greater resources at their disposal. I can see the Germans capturing Moscow and possibly Leningrad in 1941. I also see them thrusting further into the Caucus region. Though the Soviets don't capitulate, I think they're going to have a much harder time defeating the Germans in this TL. Their push west is going to take longer. In fact I don't see them being able to make it to Germany in this TL. With a simultaneous allied invasion from the West and South, the Germany of modern boundaries exclusively by the allies at the time of surrender in 1945. Their occupation of Germany is limited to the areas they handed over to Poland and East Prussia. This means that there is no divided Germany after the war. After the war Germany will eventually ally itself to the French and the Italians at least when it comes to the EEC
THE PACIFIC
Without so many British and Commonwealth troops being diverted to North Africa and the Balkans, the Brits reinforce Singapore and are able to hold onto Malaya and Burma. The Royal Navy is much stronger too since they took a beating in the Mediterranean. Also troops can pass through the Suez Canal to get to Asia which makes reinforcement quicker. The Australians and New Zealanders will stay in the Pacific theatre instead of being sent to North Africa and Greece. This may mean that Papua Territory is much better defended. Perhaps Thailand remains neutral, if not it becomes a battleground between the Japanese and allied troops early on in the war.
THE SOVIET UNION
Since the Germans invaded about a month earlier with more resources at their disposal they were able to penetrate deeper into the heart of the Soviet Empire. Moscow fell as did Stalingrad, though I believe that there is a possibility that Leningrad may survive, with a longer siege it too will be forced to capitulate. The Germans will eventually be pushed back, however a battle like Stalingrad does not occur until 1944. By the time the Soviets have reached Poland, I see the allies already being at the gates of Berlin. Because of this, the German occupation zone is limited to the parts of Germany they annexed for themselves (East Prussia) and gave to Poland in return for their land grab. After the war the only countries in Europe that become Communist are Poland and Romania. So the Soviet threat is there, however the Cold War will be shaped differently. Having suffered even more in this TL, the Soviets may have a more difficult task in rebuilding their economy, though by the 1950s I can see them enjoying the high economic growth rates they did in OTL during that decade.
ITALY
Mussolini is anxious throughout the war but he remains on the sideline. Having exhausted resources in Ethiopia and the Spanish Civil War, Italy is able to rearm itself. Italy also does well economically by supplying material to both Germany as well as the allies. By late 1944 with the invasion of Normandy having taken place, Mussolini decides to make a move. He realizes that Italy must have a place among the great powers and with the allies an invasion of Austria is coordinated. Allied troops are sent to Northern Italy and Yugoslavia and invade. Though progress is slow, by January all of Austria, Czechoslovakia and most of Bavaria have been captured. Mussolini takes part at most of the major war conferences and he is seen as more important than De Gaulle and the Free French.
After the war Italy joins NATO and is given a permanent seat and veto power on the UN Security Council. I see Italy playing a very similar role to the one that France plays in the world in OTL. By that I mean that it will invest heavily in defence and try to be a global power. Italy will also be a nuclear power, using Fezzan in southern Libya as a site for nuclear tests. I actually see the Italians and French converging on many issues after the war and being allies. This is especially true once Algerian War begins in 1954. Since Germany isn’t divided in this TL there will not be as much need for the alliance between the Germans and French. Though possibly a three-way alliance will come to fruition. I see Italy being a founding member of the EEC too.
Oil is discovered in Libya in 1950 and becomes a major benefit to the economy of Southern Italy. Italian settlers are sent here and to Italian East Africa in huge numbers. Mussolini dies in 1954 of a stroke and is mourned by his people. A more moderate fascist replaces him and King Umberto II assumes more of the power for himself. The Egyptians are going to be fomenting Arab nationalism in Libya so Italy gets involved in the Suez crisis on the side of France, the United Kingdom and Israel. The Italians are at least able to secure passage rights through the canal. However, as the Arab states cut diplomatic ties with Italy in the 1960s due to their refusal to decolonize Libya and Somalia the Italians become very close to Israel. Low intensity guerilla warfare breaks in southern Ethiopia with the guerillas being based in Kenya. Sudan is turned into a puppet state of Italy. Because of this opposition to the Sudanese puppet government comes from Egypt. I believe Italy can probably contain the guerillas if it is an authoritarian state. In 1973 Italy aids the Israelis during the Yom Kippur War and is subject to an oil embargo. However, since Libya is Italian, it actually brings in billions of dollars in oil revenue for the Italians. For the rest of the 1970s the high price of oil continues and with it the economy grows and Italy will remain an authoritarian state. Perhaps in the 1980s or 1990s democracy comes to Italy.
THE BALKANS
Italy does not invade Greece, since Mussolini does not want to provoke the British. Without the invasion of Greece there is no invasion of Crete. This is significant because this was the first time the Germans attempted a mass invasion using paratroopers. Although successful there was a high casualty rate on the German side and this made the Germans wary of attempting an airborne invasion of Britain. Yugoslavia may or may not be invaded; I'm going to assume it doesn't. In this TL German troops don't need to go through Yugoslav territory to get to Greece and Yugoslavia. Also the pro-axis government may not be toppled. If Yugoslavia is not involved then neither is Bulgaria. Their main goal during the war was to annex Macedonia as well as Greek territory. Once the war is almost won, the Yugoslavs and Bulgarians throw in their lot with the allies. The Yugoslavs join shortly after the Italians once it is clear that Germany will lose the war. The Bulgarians want to keep Southern Dobruja (annexed from Romania in 1940) and have close links to the Italians. After the war I can foresee Yugoslavia breaking up if it does not have a strong authoritarian government like Tito's that respects all ethnicities equally. Only Romania goes Communist since it is the only country in the region occupied by the USSR after the war. After the war Yugoslavia joins NATO but Bulgaria does not, since it does not want to offend the USSR.
CENTRAL EUROPE
The allies launch an invasion of Germany (Austria) from the South once Italy joins the allies in 1944. In Hungary Miklos Horthy attempts to sue for peace with the allies and German troops are sent into the country. In this TL allied troops invade and are able to prop up Horthy. The Germans are using their troops in this region to fight off the allied invasion of Austria. The allies push up through to Czechoslovakia. At the end of the war allied troops are in Czechoslovakia and it therefore becomes a prosperous democracy and regains Ruthenia. Horthy remains leader of Hungary for a while after the war but this country too becomes a democracy. Austria does not become a neutral. This role goes to Hungary and Czechoslovakia perhaps.
GERMANY
Not having to waste resources and men in the Balkans, North Africa and Italy, the Germans are much more successful in their invasion of the Soviet Union. I assume that the Germans will invade at least one month earlier with greater resources at their disposal. I can see the Germans capturing Moscow and possibly Leningrad in 1941. I also see them thrusting further into the Caucus region. Though the Soviets don't capitulate, I think they're going to have a much harder time defeating the Germans in this TL. Their push west is going to take longer. In fact I don't see them being able to make it to Germany in this TL. With a simultaneous allied invasion from the West and South, the Germany of modern boundaries exclusively by the allies at the time of surrender in 1945. Their occupation of Germany is limited to the areas they handed over to Poland and East Prussia. This means that there is no divided Germany after the war. After the war Germany will eventually ally itself to the French and the Italians at least when it comes to the EEC
THE PACIFIC
Without so many British and Commonwealth troops being diverted to North Africa and the Balkans, the Brits reinforce Singapore and are able to hold onto Malaya and Burma. The Royal Navy is much stronger too since they took a beating in the Mediterranean. Also troops can pass through the Suez Canal to get to Asia which makes reinforcement quicker. The Australians and New Zealanders will stay in the Pacific theatre instead of being sent to North Africa and Greece. This may mean that Papua Territory is much better defended. Perhaps Thailand remains neutral, if not it becomes a battleground between the Japanese and allied troops early on in the war.
THE SOVIET UNION
Since the Germans invaded about a month earlier with more resources at their disposal they were able to penetrate deeper into the heart of the Soviet Empire. Moscow fell as did Stalingrad, though I believe that there is a possibility that Leningrad may survive, with a longer siege it too will be forced to capitulate. The Germans will eventually be pushed back, however a battle like Stalingrad does not occur until 1944. By the time the Soviets have reached Poland, I see the allies already being at the gates of Berlin. Because of this, the German occupation zone is limited to the parts of Germany they annexed for themselves (East Prussia) and gave to Poland in return for their land grab. After the war the only countries in Europe that become Communist are Poland and Romania. So the Soviet threat is there, however the Cold War will be shaped differently. Having suffered even more in this TL, the Soviets may have a more difficult task in rebuilding their economy, though by the 1950s I can see them enjoying the high economic growth rates they did in OTL during that decade.