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Imagine a scenario in which Italy remains neutral during (most of) WW2. Maybe Italo Balbo doesn't lose the Duce's ear and sides with the British, or maybe the tensions between Italy and Germany over the Anschluss of Austria are far greater than IOTL. It's possible that Italy remains neutral during WW2, or maybe it joins the war against Germany at the last moment, grabbing Austria as a satellite regime or something. Other than that, the war goes on as IOTL. What would that mean for Italy during the Cold War? How would it align itself?

First, I think this is a no-brainer - Italy tries developing nukes. Surrounded by corrupt democracies and degenerate communists, and considering Mussolini's personality, nuclear weapons will be a priority.

What's more interesting to me though is how Italy aligns itself throughout the war. Does it try forming an independent Fascist bloc against both the Warsaw Pact and NATO, and initiate a three-way cold war? Does it try to play the neutral role, avoiding the era's entanglements? Is it possible they align themselves with NATO (while probably still not fully joining it)?

In the event of a fascist bloc, I wonder who would possibly join such alliance, and also how tight would it be (as far as troop deployments in allied countries etc. are concerned) and what possible routes for expansion this bloc has. It's possible that, under the cover of war around it, Italy invades Yugoslavia and creates a Croatian Ustase puppet, that is one possible member. Greece maybe another one? With a powerful internal communist movement, and a regime that is often regarded as fascist (I'm assuming in a scenario where Italy remains neutral that Greece also remains neutral and survives the war), and perhaps with a military junta that rises to power sooner due to Italian intervention, and with no one else that can protect Greece and against Turkey and maybe Soviet encroachment, It sound like Greece might naturally ally with Italy. I suppose it also matters at what point Italy joins WW2 against Germany if it does, because maybe they'll be able to grab Bulgaria (the Bulgarian king was the Italian king's son-in-law, and Bulgaria was never really the most loyal ally to Germany, so a Bulgarian defection to Italy as soon as it joins the war seems likely) or maybe even Hungary (not sure about that last one. I suppose Horthy would prefer surrender to Italy than to the Soviets, but I really don't know). Spain is another candidate, though it might be more difficult to convince them to join, but it's a likely option considering historical and ideological ties between the two regimes, and also common interests (please correct me if you think Spain would either be very enthusiastic about an alliance with Italy or very unfavorable). That brings us to Portugal. IIRC it was a founding member of NATO, never was too close to other fascist regimes despite being fascist itself, and of course it was a historical ally of Britain. So it wouldn't consider joining Italy's alliance. HOWEVER, If Spain joins with Italy into a bloc that rivals NATO, then Portugal perhaps would think twice about joining NATO, leaving it neutral, which also opens it to Italian influence. In that case, I can see a scenario in which, during Portugal's colonial wars, while NATO and the USSR each back different African rebel groups, Italy decides to back Portugal in exchange for it joining this fascist bloc.

I can also somehow see Mussolini trying to play the kind of role that the non-aligned movement did IOTL, but I think that's less likely because Italian fascism probably wouldn't want to relegate Italy to the role of a peaceful undecided neutral, and would prefer a more leading active role.

Another big issue to take into account: Italy's colonies. IOTL much of the Ethiopian highlands were still controlled by local guerillas after the Italo-Ethiopian war. I can easily see Ethiopia developing into Italy's Vietnam, draining Italy's resources and harming its international status and prestige, and eventually its stability at home. I've mentioned in another thread that I can see a scenario like Portugal and the Carnation Revolution in Italy following continuous failures in Ethiopia. But maybe that would just serve to bring Italy closer to a country like Portugal, and strengthen its international status. But the colonies are going to be a massive drain internationally because they'll essentially block Italy's attempts to join in the game to influence third world nations. Control over Libya and Ethiopia would mean no influence can be achieved among Arab countries or the new African countries, as Italy's control over its colonies is going to become the biggest issue in those relationships. Perhaps that would mean that Italy joins France, Britain, and Israel in 1956 and goes to war with Egypt, to try and punish the Arab Nationalists for agitating in Libya and also of course to keep the Suez canal open so they could still control East Africa. Maybe that leads to Italy becoming Israel's ally (at least after the French embargo it and before the US becomes Israel's main ally)?

Other than that, I can see some possible routes for Italian influence in military dictatorships and conservative regimes in Latin America and South-East Asia, but not really full-fledged allies. Those are after all America's spheres of influence, and anyway the Italian have far less to offer those countries (but who knows, maybe some regimes would prefer Italian Fascism).

There are also some ramifications to surviving Italian fascism that I'm not sure how to consider. One big issue, Algeria: if neighboring Libya is succesfully turned into Italy's 'fourth shore' then maybe this could inspire the French to do the same in Algeria and turn it into France's fourth shore, or at least make them care less about the international ramifications of retaining a colony in Africa. If both Italy and France keep some of their colonies, maybe they can turn them into kinds of self-governing dominions as a compromise with the natives. No idea if that can actually succeed.

Overall, though, I don't think Italian fascism would fare too well if it survives the War. Other than the threats decolonization poses to the Italian Empire and its stability, I just don't think Italy can really compete with the USA and USSR on any level. It will try, but it would become clear after a while that it's the least of the superpowers, and people ITTL will probably look at Italy like a bit of a joke, like a kitten that puffs its fur so it seems bigger than it really is. Maybe it would be the third power that sends a man to space or something, but that's it. What I think would eventually happen, as I said before, is that due to colonial entanglements the population becomes disgruntled and there's some kind of revolt. Now, what happens after that is interesting. I can see a scenario in which the King and the army, like IOTL, just depose Mussolini and side with the West when they see how bad the situation becomes. In this case Italy mostly-peacefuly dissolves its attempted fascist-bloc and sides with the West, like IOTL (though with more lasting Italian influences in Africa and with a more authoritarian Italy further on from that). A more interesting scenario would be if there are revolts and revolution all over the empire and all of fascism dissolves in big, bloody, wars. That would mean that the Cold War turns from a three-way race to a two-way race, and the superpowers are now going to fight among each other over who gets the spoils. It would probably look a little bit like how it did when the USSR disintegrated IOTL, complete with fears of renegade nukes being smuggled to terrorist organization, but with the added risk of world war as the two remaining superpowers try to outmaneuver themselves in the ruins of the former Italian empire.
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