Sometime ago, I made a TL that includes as a PoD what I regard as the last realistic chance for a German-Austrian union (apart from federalization of the EU, of course):
1949: Stalin gets disillusioned by the formation of the GFR and decides that West Germany is going to be wrestled from allegiance to the Western bloc by the lure of reunification as a neutral united German state. As a result, he decides to go for maximum gains in Austria, too.
1950: With the support of Soviet occupation troops, the Communist Party of Austria starts a series of strikes, which escalate to major civil unrest, with the seizure of the Bundeskanzleramt. The Austrian government is overthrown in Vienna and a Communist-led People's Front government is set up. Democratic parties' representatives flee to Western-occupied Salzburg and set up a new government. Both sides claim legitimacy over whole Austria, but the country and the city of Vienna get effectively divided between Western-occupied West Austria and Soviet-occupied East Austria. Austria is now divided like Germany and in a few months, separate states are proclaimed. The US government is alarmed by this renewed manifestation of Soviet expansionism and steps up its efforts at Soviet containtment. Moreover, America is also concerned that West Austria is not strong enough to survive on its own and starts to support the idea of a second, democratic Anschluss. The British government follows US advice with less enthusiam, the French are reluctant to allow reunification but are overruled by the Anglo-Americans.
Stalin is elated by the success in East Austria; he shares similar concerns about the vitality of East Austria, so he starts to push for a "People's Danubian Confederation" between East Austria, Czechoslovakia, and Hungary. The concerned parties are less than enthused at the perspective (the Czech and to a lesser degree the Hungarians harbor bitter feelings about such a previous union under the Habsburg, the East Austrians about the Czech ethnic cleansing of the Sudetenland Germans), so the Soviet secret police steps in and wages some sweeping purges. Compliance to Stalin's plans is ensured, even if bitterness lingers. Stalin feels confident enough to greenlight North Korea's offensive plans, expecting another easy victory.
America is even more alarmed by the new Communist aggression in Asia and reacts by staging a massive intervention in Korea, while it goes back to a partial wartime mobilization stance. However, Truman is concerned about a possible Soviet/Communist Chinese intervention in Korea and gives MacArthur strict orders to build a strong defensive position on the neck of the Korean peninsula on the 40th parallel, and only to make cautious advance towards the Yalu. MacArthur reluctantly complies. Mao orders PRC intervention, even if some other CCP leaders have misgivings and would prefer to make themselves content with the rump North Korean buffer zone that the 40th parallel demarcation zone would create. Stalin reluctantly gives permission for a PRC offensive, hoping to wear US power down in Korea with a long war against his CC proxies.
Despite some hard fighting, the American defensive line on the 40th parallel holds out against the PRC offensive, even if US reconnaissance thrusts towards the Yalu are overrun. America sends reinforcements to Korea, the CC suffer very heavy losses in their futile attempts to break US defenses. Truman and the UN reluctantly authorize heavy bombing of Manchurian targets.
1951-52: The PRC Army continues to suffer very high losses in Korea for limited gains, while the US Aviation stages a round-the-clock carpet bombing of Manchuria. After most combat-worthy CC troops have been wasted in futile attacks, and the US bombings have disrupted their supply lines in Manchuria, the American troops start a gradual advance towards the Yalu. By the end of 1951, the front line has reached the Yalu in western Korea. The USA send veiled threats of using the nukes to level the PRC if it doesn't concede Korea to the UN. A coup overthrows defiant Mao, and Red China reluctantly agrees to a cease-fire. Korea is reunified in the Western camp.
Stalin is livid for the loss of face that the defeat in Asia caused. Besides giving his support to the overthrow of Mao, he orders to step up Communist activities against Western interests worldwide. He also starts a new sweeping row of large-scale purges within the USSR and in Eastern Europe.
In Western Europe, local Communists (sometimes going beyond Stalin's intentions) stage clumsly uprisings. In France and Italy, this leads to outlawing of local Communist parties (their place in the political system is mostly taken by local Socialist parties). In Finland and Yugoslavia, however, Stalin decides he can risk throwing Soviet might in the fight and orders a Soviet intervention when the local Stalinist uprisings fail, quoting Finnish "violations" of the peace treaty and Titoist "selling-out" to the West as a pretext. Despite heroic Finnish and Yugoslav resistance, Finland and Yugoslavia are overrun by the Red Army, and Stalinist puppet governments are set up in both countries.
A Communist uprising in nothwestern Iran manages to seize control of the territory. Communist-controlled Iranian Azerbajian petitions for "reunification" with their Soviet brethren, the Red Army enters the area and secures its hasty annexation by the USSR.
The West is alarmed by reckless Soviet expansionism, despite the recent great victory in Korea. America (and to a lesser degree Britain) steps up pressure to implement German and Italian rearmement as an anti-Soviet bulwalk. Washington also gives open support to Italian reunification with Trieste and West Austrian reunification with West Germany. A referendum in West Austria approves reunification with West Germany by 68.3%, Italian troops occupy the Free Territory of Trieste (both Zone A and Zone B) and its reunification with Italy is approved in a referendum by a 78.4% majority. Despite French misgivings about rearmement of ex-Axis powers, the impasse is broken when Rene Pleven proposes a wide-ranging plan to create a Pan-European Army under a supranational European leadership.
Dusting off an old Communist idea made possible by Soviet control of Yugoslavia, Bulgaria, Yugoslavia, and Romania form the "People's Balkan Confederation".
Alarmed by Soviet conquest of Finland, Sweden joins NATO.
West Germany and West Austria reunify and Italy annexes the Free Territory of Trieste. Allied countries give their assent when the West German Basic Law is amended to express the "eternal" renunciation of the German people to claims over Alsace-Lorraine and South Tyrol.
In America, relatively quick and decisive US victory in Korea paves the way for Truman's re-election for a third term in 1952 (he is extempt from 22nd Amendment's two-term limit). Despite his reluctance, Truman runs for a third term at the insistence of the other Democratic leaders that want to capitalize on his popularity after the victory. General Eisenhower declines to run against a successful war president.
1953-54: Stalin dies. His influence boldened by the recent purges, Beria is able to secure the succession and make himself the new leader of the USSR. Spurred by news of Stalin's death, anti-Communist revolts occur in East Germany and East Austria, savagely repressed by the Red Army.
France, Belgium, Netherlands, Luxemburg, West Germany, and Italy sign a series of treaties that establish the European Defense, Economic, and Political Community (commonly known as "European Community" for short). The supranational organization creates a pan-European military with wartime unified command, integration at the battalion level, and a common budget, arms, and centralised military procurement. In peacetime French and Benelux components report both to their national governments and to the EC command, whereas German and Italian components only report to the EC command. West Germany and Italy amend their constitutions to allow defense cooperation beyond their borders under the EC aegis. On the economic side, the EC creates a customs union and establishes the gradual setup of a single market. To oversee the supranational integration, a set of EC institutions is created including a directly elected assembly ("the Peoples’ Chamber"), a senate appointed by national parliaments and a supranational executive accountable to the parliament.
Great Britain does not join the EC owning to its strong supranational element, however it establishes an intergovernmental "associated" status with partial security and economic integration. Nordic countries express interest in getting a similar status.
A coup occurs in Egypt with the takeover by nationalist officers (led by Nasser) with a Pan-Arab, philo-Soviet platform. Political instablity also occurs in Iran, with a vicious power struggle occurs between the Shah and the charismatic Prime Minister Mossadeq. Despite misgivings related to the reformist program of Mossadeq, who wants to nationalize Iranian oilfields, the Turman Administration is reluctant to defy the popular premier and risk further Soviet expansion in the area, after Soviet annexation of Persian Azerbajian. A compromise is eventually reached where Mossadeq establishes a republic and implements partial nationalization of the oilfields but accepts to maintain a staunch philo-Western foreign policy. Iran stabilizes under the popular leadership of Mossadeq and becomes a pillar of Western security in the region like Turkey.
Combined American-European operations in South East Asia sponsor a philo-Western coup in Indonesia and uproot Communist insurgencies in Malaysia, Indochina, and Indonesia. Communist China, still smarting from its defeat in Korea, ceases support to Indochinese Communists after America threats a military intervention.
1955-56: A renewed row of anti-Communist insurgencies in Poland, Czechoslovakia, and Hungary spurred by economic woes and reaction to Stalinist purges is brutally repressed by the Soviets. Beria is trying to implement an akward mix of limited economic reforms while keeping iron-tight Stalinist control of the populace into place, with scarce success.
The example of the Pan-Arab coup in Egypt inspires the Arab population of Algeria to start a nationalist insurgency for independence. On its part, Nasserite Egypt implements nationalization of the Suez Canal and sets up a blockade of Israeli traffic. Israel and the EC countries react by unleashing a combined attack against Egypt: Sinai is conquered by Israel, while the Canal zone and the strategic centers of Egypt are overrun by British and EC forces. Nasser flees from the country and takes refuge into Syria. A philo-Western regime is established into Egypt. However, Nasser from Syria rouses Arab public opinion against Israel and the Western countries. Syria and Jordan under the pression of their populace reluctantly attack Israel. The counterattack of the Zionist state quickly overruns the West Bank and the Golan Heights. The vast majority of the West Bank and Golani Arab population flees into Syria and Jordan. The Soviet Union is bogged down with the repressions in Eastern Europe and can't help Egypt.
After a 34-year Democratic dominance, Earl Warren wins the 1956 Presidential election for the Republican Party. A member of the progressist wing of the party, he maintains New Deal social programs and manages the start of racial desgregation in America.
1957-58: A series of coups in Syria, Jordan, and Iraq leads to the union of those states into a Pan-Arab state named the United Arab Republic. Israel annexes the West Bank and the Golan Heights. The Canal Zone is put under international administration, with its revenues being split between Egypt and the EC on a 60-40 share. Sinai is returned to Egyptian administration but demilitarized. The EC subsidizes the construction of the Assuan Dam and the artificial El-Quattara Sea. Sudan is united to Egypt in a federation. The new Egyptian regime stabilizes, even if anti-Western resentment lingers. The Middle East splits between a pro-Western front (Egypt-Sudan, Turkey, Iran, Israel) and a pro-Soviet front (UAR). The conservative monarchies of the Arab peninsula remain mostly pro-Western, even if there is resentment about Israel annexation of Jerusalem.
Denmark, Norway, and Sweden obtain "associated" status with the EC. Inspired by the EC model, France implements a series of institutional reforms to stabilize its parliamentary system. Under the effect of budding EC economic integration, Western European economies are experiencing an economic boom, with gradual spread of American-like consumerist affluence.
The EC continues to fight the insurgence in Algeria, with no side getting the clear upper hand.
To block the flight of East German and East Austrian population to the West through the Western enclaves of West Berlin and West Vienna, Beria orders to erect the Twin Walls of Berlin and Vienna overnight.