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In this timeline, Stalin decides to heed mounting warnings about an imminent invasion by Germany and not to risk a defensive war, preferring a pre-emptive attack. On May 15, 1941 he orders the Red Army to attack Poland, Romania, and Finland. Although the Wehrmacht had been massing to the borders in preparation for their own attack, it is hard-pressed to contain the ferocious Soviet attack, although it manages competently. Italy, Hungary, and Spain join Germany, Finland, and Romania in the war against the USSR and Mussolini announces the sending of a large Italian contingent to the Eastern front. Sweden declares war on the Soviet Union as well, although both Spain and Sweden make it clear that they wish to maintain neutrality in the war with Britain. Japan denounces Soviet aggression, and starts to relocate troops from China to Manchuria. The Japanese Army presses to honor the defensive alliance with Germany and attack Russia in June or July, although the Navy keeps pushing for an attack south if the embargo problem is not solved.

Hitler cancels Operation Merkur (invasion of Crete), although the option to reschedule it at a later date is maintained. Moderates persuade him to seek a detente with Western Europe in this situation. Petain, the governments in exile of Netherlands and Norway, and local fascist leaders are contacted and a peace treaty is offered. According to it, Vichy France cedes Alsace-Lorraine to Germany which annexes it alongside Luxemburg, and Nice, Savoy, Gibuti, and Tunisia to Italy, but annexes Walloonia. Netherlands annexes Flanders. Germany withdraws all troops from France, Netherlands, Denmark, and Norway, and restores the sovregnity of those countries, provided they maintain neutrality and secure their borders in the war between Germany and Britain. The governments in exile of Netherlands, Denmark, and Norway are welcomed back in their countries provide they accept to form a coalition with local fascist forces and help Germany in the fight to defend Europe from the USSR. Belgian Congo is partitioned between Germany and Vichy France, which administers it all for the duration of the war, and cedes Madagascar to Germany, which shall use it to deport Jewish population from Axis countries after the war. Advisors convince Hitler that extermination of “undesirable” minorities like Jews and Slavs “unsuitable” for assimilation is too detrimental to the war effort and politically counterproductive to strike peace and cooperation wtih Western Europe, and the deportation option needs to be used to settle the issue.

The Danish government and Petain enthusiastically accept the peace proposal and sign it. Vichy France joins the Axis as a full member, the French PoWs are freed and re-equipped to be sent to the Eastern Front. Free France movement splits, some of its members recognize Vichy as the legimate government and return home, others stay with DeGaulle which keeps denouncing Petain as an illegitimate government and a lackey of Germany but his following within France and in the French colonies dwindles to a fringe.

The monarchs and governments in exile of Netherlands and Norway are more heistant, however most of their countrymen and the Belgian population seem to welcome peace and end of German occupation and to give some credit to German propaganda about a common cause to protect Europe from Bolshevism. Local fascist leaders (Mussert and Quisling) threaten to ride this wave of popular opinion to form all-fascist governments and sign the peace treaty, so they reluctantly accept. Churchill is tempted to intern them, but he is advised against such a move. An uneasy coalition government cohabitation between democratic parties and fascists starts in Netherlands, Norway, and Denmark. Those countries grant economic cooperation to Germany and send volunteer expeditionary corps to the Eastern Front, but decline a fuller military involvement (although local fascists keep pressuring for it).

Netherlands lifts the embargo on Japan at Germany’s insistence, the availability of DEI resources gives strong leverage to the IJA in its tug of war with the IJN and the Japanese government starts to plan to attack the USSR, despite misgivings about the poor outcome of previous clashes with the Red Army. Preparations start for an offensive against the USSR. The Japanese government and high command is divided about how to deal with China if a large part of military resources have to be shifted against Russia, some advice to send Chiang a peace offer if he shall recognize Manciukuo and give Japan economic concessions, others wish to retain direct control of China as a puppet state despite the strategic overstretch with a two-fronts war.

Nazi Germany sends a peace proposal to Britain, with the reluctant support of Italy (Mussolini hoped for more gains). Germany and Italy pledge not to station any troops or ships in France, Netherlands, Spain, and Norway if Britain shall return to neutrality in the Axis-Soviet struggle and pledge not to interfere in the political status of Axis countries. They ask the cession of Gibraltar to Spain and Malta and Somaliland to Italy, although Britain is welcome to maintain previous bases in those areas as a lease. Serbia and Greece shall be restored to independence (with cession of Slovenia to Germany and Dalmatia and Kosovo and northern Epirus to Italy) under a deal similar to Netherlands and Norway if Britain withdraws from Crete and restores it to Greece. Croatia (with Bosnia) shall mantain its status as a member of the Axis.

Churchill rebuffs the peace offer and sends his own offer of alliance and aid to the USSR, stating that the war aim of Britain must be the overthrow of the Axis and the liberation of Europe from nazism and fascism, and the peace deal leaves Germany in effective control of continental Europe and says nothing about Poland and Czechoslovakia. He also refuses any territorial cessions and protests the partition of Belgium. However, a strong peace faction grows back in Britain, which abhors spilling British blood and money to help Stalin conquer Europe and states that with Petain in strong control of France and many European peoples apparently accepting the new settlement and/or supporting the anti-communist fight, Churchill’s anti-fascist crusade has grown an task impossible or ultimately only beneficial to Bolshevism. They are reluctant to make any territorial cessions, but favor the opening of peace talks with Germany and Italy.

Churchill’s grip on power becomes shaky as his supporters and the peace faction clash in the Parliement and in the country. He heeds to Roosevelt for political support, which FDR provides as much as he can. However Roosevelt has his own problems as well since the vast majority of the public opinion and the Congress remain sympathetic to Britain but have taken a strong anti-Communist stance after the Soviet attack. He is able to maintain growing economic and military assistance to Britain but the Congress votes a trade embargo and a ban of Land-Lease supplies to the USSR over FDR’s veto. He also maintains the trade embargo to Japan but more and more question its effectivness after trade between DEI and Japan resumed.

Several advise Hitler to make some token concessions over Poland to help the peace faction in Britain gain the upper hand. He resists, since he always meant all of Poland for German colonization. However, he confirms the directive about future mass deportation of European Jews to Madagascar or Western Siberia, slightly relaxes criteria for Germanization of “suitable” Poles and Czechs in annexed areas, and accepts to send London an offer to restore Polish control over the General Government if the Poles shall agree to full military cooperation with the Axis. He plans to renege on the deal after vicrory over Russia, and orders to prepare secret plans for the deportation of Poles and Czechs “unsuitable” for assimilation to Western Siberia or Madagscar or some other African territory bought from allied countries for the task if both provide unsuitable.

Stalin welcomes the British aid and offer of alliance, although he is concerned about the firmness of Churchill's hold on power, the increasing anti-Soviet stance of America despite efforts by FDR, Soviet intelligence, and local Communists, growing rumors of a Japanese attack, and the performance of the Soviet armies so far. Although it seems like the Red Army is posied to overrun Moldavia and Wallachia, it has failed to achieve a strategic breakthough in Poland and Finland, and it is getting pushed back in some places. He sends an offer to Japan of a commercial treaty and to recognize and support Japanese control over China (which he plans to renege after victory in Europe). However he also orders to put the Far Eastern military districts on full alert, and to prepare a pre-emptive attack on Japan if talks fail.
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