What if Mussolini had remained steadfastly neutral during World War II, except possibly for some units of Fascist volunteers fighting against the Soviet Union, much like Franco did? Assuming that most of the rest of the war happens as in OTL, I think that some possible consequences could be:
- No North African campaign or front, resulting in much less Allied commitment to the Mediterranean. There would be an Anglo-American invasion of German-occupied France in 1943, possibly even in 1942.
- WWII ends with the line between Soviet and western Allied forces further to the east, but there is still some kind of Cold War.
- If a NATO-type organization is formed, Mussolini's Italy probably won't be part of it because the liberal democracies don't want to openly ally with a fascist nation. On the other hand, there could still be considerable cooperation between Fascist Italy and NATO or its equivalent based on a common anti-communist motive - again, similar to the case of Franco's Spain.
- There could be growing unrest in Italy's African colonies during the 1950s and 60s. Would Italy let some colonies go, or fight to keep all of them?
- Suppose Mussolini dies in 1965 - what happens next in Italy?