Mussolini stays neutral or joins the Allies. "Fascism" wouldn't mean what it's come to mean.
Mussolini staying neutral is definitely a big rarely discussed possibility. Most of the European dictators wanted to do just this – they viewed themselves as more traditional than either the democratic maritime Atlantic states or totalitarian, largely state-controlled Nazi Germany. Fascist Italy, with its “corporatist” structure and strong alliance with the Catholic Church via the Lateran Treaty, was an “intermediate” dictatorship between the two types, and I have certainly imagined the possibility of Mussolini staying neutral during World War II without ever considering the consequences before today.
If Mussolini stayed neutral, the first major consequence would be the absence of a war in North Africa. Consequently, Hitler would have never diverted troops from his effort to conquer Soviet Bolshevism, and more importantly without North Africa oil Hitler would have more likely recognised the greater strategic value of the Caspian oilfields vis-à-vis the city of Stalingrad. So it’s quite possible Hitler would have captured the Caspian oilfields of Azerbaijan and threatened those of Iran.
Things become really interesting here, because not having to fight in North Africa could have given the British and Americans more potential to work with Pahlavi Iran. In actual history, of course, Reza Shah Pahlavi was overthrown by the British and replaced by his son Muhammad Reza Shah Pahlavi. Would this prove impossible if Hitler had not had to divert troops to North Africa, or would the British have been able to not only overthrow Reza Shah, but also to get Iran to declare war on Germany and force the Germans out of the Caspian as or more rapidly vis-à-vis the actual war??
If Reza Shah stayed in power and became more pro-German, there would be a possible route to more Caspian oil in Turkmenia, which could have doomed the Soviet Union and led easily to Moscow being captured during the relatively mild winters of 1942/1943 or 1943/1944.
There is also the issue of which side a more-pressurised
Turkey would have taken in the war under this scenario.
Another issue, much more relevant to Italy itself, is the possibility that if Mussolini had stayed neutral Italy could have held its colonies in Africa for much longer than Britain and France likely could. I imagine indeed that Italy could have held its African colonies until the
1980s, as the country would have had far more resources to fight a colonial war in Africa than did Salazar’s Portugal – who held their colonies until
1974. However, Italy holding its colonies until the 1980s, whilst conceivable to me, depends on how long Mussolini would have lived in the absence of war (if Mussolini lived as long as Salazar did he would have died in
1964) and Italy’s post-Mussolini politics.
