I did a bit of searching to see if Zarkovs thread was new.
Napoleon XIV has 'WI Mussolini Develops Secret Weapons', which is certainly related. From it Talonbear01 writes: "Instead of thinking of new secret weapons, imagine if the Italian simply had better equipment at the start."... the outrageously named Prunesquallor writes: "what you've got to remember was the Italian system of weapons procurement and manufacture, the worst easily of any of the bigger powers. This was what screwed them up."... Redbeard develops this: "But like other have already said the problem for the Italians wasn't getting the ideas, but having the industry to build them."
Magnum has 'The Uber-Italians' where David Bar Elias delivers a telling blow with: "I'd recomend Henrik Krog's "Italian Surge." Basically, Italy starts off in the 1920s with the goal of energy independence. Their army is reformed from the observers that the Italians send to observe the South American conflicts in the 1930s. Musso never adopts Hitler's anti-semitism (although the Italians still ally with Germany militarily), which allows for millions of Jews to pour into Italy (and it's colonies)"... yet Superdude counters "I thought it was pretty implausible. Everything went right for the Italians."... Basileus then puts the boot in with "Not implausible, impossible. Italian Fascism was a threat grave, but not serious, for Western democracy."
Arizona Ranger has 'Il Duce At Sea: Italian Navy More Potent' where Gremlin writes:"So we need an Italy that is in a better economic postion to expand its fleet without taking resources from other areas - Libyan oil!"... Amerigo Vespucci cautioned with "You'd have to POD the depth of the oil as well. In OTL, the Libyan oil was too deep for extraction until the late 1950s."
Trajen777 has 'Italy is a Major Power in WW2' [and from his POD boy is it ever]. MarkA appealed for commonsense with "Italy was in no economic shape to do the things you suggest."... Arctic Warrior notes "I think Italy could have done better, but it was very much dependant on the Fascist system."... Jolo contributes "I suppose the only possibility for Italy to solve her problems would be to have *really* big advances in terms of using ceramics and other modern materials to build amor, composite materials, and the likes. That would be pretty unlikely, but not the first time such "sudden advances" happen."
There are of course others but none that substantially support Zarkov's thread. My take;
Italy had the technical capability, but not the economic capacity. Exploiting Libyan oil is held up as the basis for advancing economic capacity, but there are technical issues around this. A 'sudden advance' could yield gains here, but there there is doubt about how well the Fascist system could support such advances.
The historical view on the positivity of Fascist economic policy isn't unanimous... though I think that's a moot point really. Italy was a basket case and had a lot of issues to work through; even if Fascist policy was excellent I can't see it riding out the shocks delivered by the Depression.
But this doesn't conclusively eliminate a 'sudden advance' in Libyan oil exploitation. Then again, neither does this support the major power suggestion. There is of course a middle ground, that a sudden advance in oil exploration technology yielded up a minor, but reasonably substantial, boost to the economy and, while not changing the general thrust of Fascist economics, does permit Mussolini to cream off more funds into the war industry. This general scenario satisfies Zarkov's need for a qualitative boost without making the more hard-boiled commentators (incl. myself) roll their eyes.
Ordinarily this would lead to asking 'where is the money best spent'... but this is Fascist Italy we're discussing, so comes down to 'who does Mussolini favour?'. This point is very arguable, but I'll take the simpler option of spending on the army: if he covets land, he needs soldiers, not sailors or airmen. So it goes into tanks and guns. The extra money loses a bit of momentum as x amount is sucked out of the system via corruption, but enough remains to advance changes within the command, doctrinal, personnel and logistical structures. Not enough to move Italy out of minor power status, but things are certainly looking better.
The basic premise seems to work: a fitter Italian Tenth Army defeats British Eighth Army and exploits to the Nile/Suez. There are implications for the Greek/Albanian actions, plus Malta/Crete to be worked through and I want to revisit the role of DAK. Still miles away from looking at Spain/Gibralter. One important step is to start reflecting through the potential impact of Zarkovs idea on the prologue period of Max Sinisters comprehensive '1941: Hitlers Mediteranean Strategy'.
Croesus