I came up with this idea earlier tonight and have been toying around with a map, which is below. Admittedly, the map sucks, but give me a break--it's early in the morning here, and all things considered it is my first. Thus, I am sure there are inaccuracies and whatnot that I'll probably get hazed for.
Anyway. It is in the early 1940s, and Germany, France, England, and Czechoslovakia have recently recovered from a brutal war fought over the Sudetenland, for in this TL Chamberlain did not appease Hitler. The Nazis were overthrown, but Germany remains under a far right-wing government. Mussolini, Franco, and other fascists have stayed out of the war and remain in power.
Meanwhile, the Soviet Union has been gathering strength. They have managed to annex the Baltic states in the chaos at the end of the Sudetenland War, and are making eyes at Eastern Europe. Poland, Yugoslavia, and Romania are aware of this and have signed a mutual defense agreement, which France, Greece, Czechoslovakia, Norway and the English later sign as well. For the lack of a better name at the moment, I'll call the agreement NATO.
On the map:
Black = Germany
Green = Italy, Spain, and Portugal, which remain fascist
Blue = ATL NATO
Yellow: Non-aligned states
Grey = States that feel threatened by their neighbors or are de facto allies of other countries
With an encroaching Soviet Union, will this NATO make alliances with non-democratic states? What role would the United States and Japan play? How does this affect the balance of power and what is possible in this TL?