It will be very interesting to see how Wagner gets Petain's French regime - (I don't think Petain has set up shop in Vichy ITTL, and if he moves the capital back to Paris quickly there won't be the tacked-on "Vichy" and they will just be known as the "French State") - on side, forestalling the rise of the Free French.

Easy, don't take any territory from France (that they really care about Franco wants Morocco but the French can be persuaded to let it go), let them run wild in Africa, concessions in the Middle East (a share in the Suez Canal and Iraqi oil), all in exchange for support in Eastern Europe and the Soviet Union.
 
Easy, don't take any territory from France (that they really care about Franco wants Morocco but the French can be persuaded to let it go), let them run wild in Africa, concessions in the Middle East (a share in the Suez Canal and Iraqi oil), all in exchange for support in Eastern Europe and the Soviet Union.

I don't think its that easy. Firstly, the Germans are hated ancestral enemy that have just astoundingly reversed the hard-won outcome of WW1. Blood-soaked bitterness there.

Also, this absolutely dominant German victory over France may make the Germans quite cocky and overambitious in their demands.

Now that Italy AND Spain have attacked France, they will want concessions. But if Wagner forces Petain to surrender too much - particularly bits of mainland France itself like Nice, Savoy, Corsica, Basque country, etc - that will totally discredit Petain's regime and pro-Axis collaboration will take a nosedive. Ditto for giving away huge chunks of the French Empire. How will Wagner balance these competing claims, including the desire of his own people to "punish" the French for Versailles? That will be quite an interesting tightrope.

There's also the (understandable) German concern that if you leave the French Empire and military too strong - (which while it will help shore up Petain and may boost the popularity of pro-Axis collaboration in the short term) - the French may turn around one day and stab Germany in the back once they have recovered their strength, in alliance with their former British allies. The French are historical enemies after all, how can Wagner trust them? Conversely if Wagner weakens Petain's regime too much like Hitler did ITTL it will once again discredit pro-Axis collaborationism and fuel the rise of the Free French.
 
So the war will continue! Wagner would be best to pummel the British to submission from the air
I hope not; destroying war production of weapons only has an effect when those weapons are actively being used up. This only happens in attrition, which only happens in a high-intensity front like North Africa. In this case, the destruction of Britain's production capacity would be to have an effect on her ability to support the war in other theaters like North Africa. Destruction of production capacity by itself has virtually no effect without an invasion to take advantage of it, and terror bombing has been proven in numerous cases to be completely counterproductive.

I think Wagner would do best if he can direct more resources towards North Africa and use his allies to gain more control over the rest of Africa and open up more fronts, as Britain can't hope to fight fronts on all of her African colonies at the same time (The Belgian Congo alone has around 2000 km of borders with British colonies). Some of them are going to fall very quickly, and hopefully it would spread out the British forces so much that no one colony will have quite enough forces to defend against French/Spanish/Italian forces concentrated on one colony at a time.
 
I hope not; destroying war production of weapons only has an effect when those weapons are actively being used up. This only happens in attrition, which only happens in a high-intensity front like North Africa. In this case, the destruction of Britain's production capacity would be to have an effect on her ability to support the war in other theaters like North Africa. Destruction of production capacity by itself has virtually no effect without an invasion to take advantage of it, and terror bombing has been proven in numerous cases to be completely counterproductive.

I think Wagner would do best if he can direct more resources towards North Africa and use his allies to gain more control over the rest of Africa and open up more fronts, as Britain can't hope to fight fronts on all of her African colonies at the same time (The Belgian Congo alone has around 2000 km of borders with British colonies). Some of them are going to fall very quickly, and hopefully it would spread out the British forces so much that no one colony will have quite enough forces to defend against French/Spanish/Italian forces concentrated on one colony at a time.

Or Britain could effectively bring all of Sub-Saharan Africa under its influence. Portuguese and Belgian colonial soldiers will not fight for the Reich, and French colonial forces may be similarly disinclined (depending on what happens with Petain's regime) as well as very thin on the ground outside of French North Africa. The Italians are similarly in a very bad position in East Africa. Also, the native African populations have no love for their colonial rulers.

If the British put some effort in, all of French Sub-Saharan Africa could be lost to a native black, independent, pro-Allied, Free French republic-in-exile led by this man. Which would be very cool - and a surefire way to boost the popularity of Petain's regime and get it into the Axis. The Sahara could be the border of an Axis vs. British/Free Francafrique stalemate (because warring across the Sahara is simply not a logistical option, and even if you lock out the Royal Navy from the Mediterranean that will allow the Axis to hold North Africa and the Levant, but the British - with American assistance - will still control the rest of the African coast).
 
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Yes, the British COULD concentrate everything on French and Italian Africa and win.

But they have to let enough troops at home. While defending Far East and India against a possible Japanese attack and possible rebellions. Soon they will HAVE to defend Near East, and they may have to defend Persia too.

Near East (with its oil) and Home take priority, and then India and Far East, and only then Africa.
 
Yes, the British COULD concentrate everything on French and Italian Africa and win.

But they have to let enough troops at home. While defending Far East and India against a possible Japanese attack and possible rebellions. Soon they will HAVE to defend Near East, and they may have to defend Persia too.

Near East (with its oil) and Home take priority, and then India and Far East, and only then Africa.

Japan probably won't move south. The Axis are coordinated ITTL, so if the Japanese escalate it's probably north, into Eastern Siberia in conjunction with a German invasion of the Soviet Union*.

They can probably buy Indochina/get its independence as part of the Japanese SOI from Axis France, but that's only after the war, when the Allies have no choice but to accept Axis gains. Moving back to Britain, even if the Japanese don't move south, the possibility alone will probably tie down a lot of the British forces. As for the Near East...well, the Axis have better logistics, IIRC starting early 1941 Italy began to expand the port and rail facilities in Libya, and with Nazi Germany's byzantine bureaucracy butterflied by Wagner, well, I've heard it said with proper logistics and support Rommel would actually have stomped Montgomery flat.

Even if the British Royal Navy can retake Gibraltar, if they lose Malta (which they probably will) and the Germans can close Suez to Allied shipping**, they won't be able to supply their forces in the Middle East except through India, and even then it's a long supply line. They can probably keep the Axis from Persia and the Gulf states, but Egypt, Iraq, Lebanon, the Trans-Jordan and Syria are probably lost causes.

*I'm not sure how much the Germans can or should take from Russia. Should they go all the way to the Urals, or should they stop at the Dnieper? Japan though will want Soviet Sakhalin and the Maritime Province, and possibly Khabarovsk as a puppet/buffer state at the least for a joint attack on the Soviet Union. Maybe more, if the Germans would want them to end their war in China on status quo ante bellum (for the most part - Japan will not give up either Manchukuo or Mengjiang).

**They should keep the Suez open to neutral shipping. Dewey might try to ship supplies to the Allies in the Middle East, but I doubt Congress would allow such a provocative act.
 
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I don't think its that easy. Firstly, the Germans are hated ancestral enemy that have just astoundingly reversed the hard-won outcome of WW1. Blood-soaked bitterness there.

Also, this absolutely dominant German victory over France may make the Germans quite cocky and overambitious in their demands.

Now that Italy AND Spain have attacked France, they will want concessions. But if Wagner forces Petain to surrender too much - particularly bits of mainland France itself like Nice, Savoy, Corsica, Basque country, etc - that will totally discredit Petain's regime and pro-Axis collaboration will take a nosedive. Ditto for giving away huge chunks of the French Empire. How will Wagner balance these competing claims, including the desire of his own people to "punish" the French for Versailles? That will be quite an interesting tightrope.

There's also the (understandable) German concern that if you leave the French Empire and military too strong - (which while it will help shore up Petain and may boost the popularity of pro-Axis collaboration in the short term) - the French may turn around one day and stab Germany in the back once they have recovered their strength, in alliance with their former British allies. The French are historical enemies after all, how can Wagner trust them? Conversely if Wagner weakens Petain's regime too much like Hitler did ITTL it will once again discredit pro-Axis collaborationism and fuel the rise of the Free French.

Or Britain could effectively bring all of Sub-Saharan Africa under its influence. Portuguese and Belgian colonial soldiers will not fight for the Reich, and French colonial forces may be similarly disinclined (depending on what happens with Petain's regime) as well as very thin on the ground outside of French North Africa. The Italians are similarly in a very bad position in East Africa. Also, the native African populations have no love for their colonial rulers.

If the British put some effort in, all of French Sub-Saharan Africa could be lost to a native black, independent, pro-Allied, Free French republic-in-exile led by this man. Which would be very cool - and a surefire way to boost the popularity of Petain's regime and get it into the Axis. The Sahara could be the border of an Axis vs. British/Free Francafrique stalemate (because warring across the Sahara is simply not a logistical option, and even if you lock out the Royal Navy from the Mediterranean that will allow the Axis to hold North Africa and the Levant, but the British - with American assistance - will still control the rest of the African coast).
Keeping the victorious Axis from demanding too much is possible with the right influence. Perhaps Wagner could simply remember what the Treaty of Versailles did to Germany and now that the results of that are clear, vow never to create as vengeful an enemy as France did. If that happens, he could take Alsace-Lorraine (to satiate German demands for avenging Versailles) and give otherwise generous terms to France and Belgium, which would make the Belgian and French colonial troops much more likely to fight on the side of the Axis (it even has a good change of preventing the Free French from becoming so powerful in the first place).

The Belgian Congo is a stretch, but considering how many French African colonies had to be fought over before they sided with the Free French OTL, it's very possible that they could side with the Axis if given the right terms (France's terms ATL seem reasonable, but we haven't seen what sort of deal Belgium got, so we don't know which way they'll go). The overall lack of troops on the ground and resentful native populations is an issue though, and now that I think of it, it might prevent them from seriously attacking British colonies. However, it also affects the British colonies as well, so unless they ship in serious reinforcements, they won't be able to attack Axis-aligned colonies either, it'll just be a sort of quiet stalemate.
 
For Axis to win, all of their enemies must be neutralised, either by being isolated, crushed or reconcilled.
France and Benelux can be reconcilled, USSR can not, not without serious regime change.
France changed regime to one willing to reconcille Germany, whats left of USSR would have to do the same, voluntarily or once Germans march through Moscow.
 
I hope not; destroying war production of weapons only has an effect when those weapons are actively being used up. This only happens in attrition, which only happens in a high-intensity front like North Africa. In this case, the destruction of Britain's production capacity would be to have an effect on her ability to support the war in other theaters like North Africa. Destruction of production capacity by itself has virtually no effect without an invasion to take advantage of it, and terror bombing has been proven in numerous cases to be completely counterproductive.
Not at this point, there really wasn't any case studies or real life examples. Countries were still terrified of what they thought bombers could do to their cities. Careful you're not projecting today's knowledge back into that historical time period!
 
Not at this point, there really wasn't any case studies or real life examples. Countries were still terrified of what they thought bombers could do to their cities. Careful you're not projecting today's knowledge back into that historical time period!

Or, Wagner could just be said to avoid the bad publicity that comes with bombing urban centers.
 
Keeping the victorious Axis from demanding too much is possible with the right influence. Perhaps Wagner could simply remember what the Treaty of Versailles did to Germany and now that the results of that are clear, vow never to create as vengeful an enemy as France did. If that happens, he could take Alsace-Lorraine (to satiate German demands for avenging Versailles) and give otherwise generous terms to France and Belgium, which would make the Belgian and French colonial troops much more likely to fight on the side of the Axis (it even has a good change of preventing the Free French from becoming so powerful in the first place).

Exactly!

I think Wagner should take a different approach then OTL. What if he negotiated (very friendly terms) with France, Belgium and the Netherlands and turned back all their land to them. So all German soldiers were out of those countries and they were all sovereign nations. It creates a buffer between GB and Germany that I would think GB could not fly over. This makes the war much more difficult for GB to continue because their only approach is very restricted. If Germany creates trading partnerships with France, Belgium and the Netherlands for the raw materials they need, it now puts GB in the role of quarantining all of Europe. That would risk France, Belgium and the Netherlands lining up with Germany against Great Britain. If those countries truly were united with Germany against GB in a “freedom of the sea’s” issue this becomes an almost impossible scenario for GB. Of course this assumes that Wagner can become almost Bismark-ion in his diplomacy. But in hind-sight it doesn't seem like such a stretch...
 
UK was perfectly happy with invading neutral countries.
Germany can't simply turn France and Benelux into neutral buffers.
Wallies WILL invade europe once they gather enough strength to do so.
 
UK was perfectly happy with invading neutral countries.
Germany can't simply turn France and Benelux into neutral buffers.
Wallies WILL invade europe once they gather enough strength to do so.

That would be even better! World opinion would quickly turn against GB. They already invaded neutral Norway in this TL. To invade a second or third neutral country would establish them as the aggressor nation! Plus if GB is invading and attacking Belgium or France their soldiers are getting killed by non-Germans. Germany is then invited into those countries to help defend after initial casualties are taken by others! What a WIN-WIN situation for Germany.
 
Well, yes and no. UK won't invade unless either its certain France/Benelux immediately switch sides back to Wallies, OR that it has support of USA or USSR, preferably both.
Nobody gives a damn about being branded as aggressor, if they think they can win. It won't matter. They know that if they win, history will remember them as liberators, not aggressors.
 
Well, yes and no. UK won't invade unless either its certain France/Benelux immediately switch sides back to Wallies, OR that it has support of USA or USSR, preferably both.
Nobody gives a damn about being branded as aggressor, if they think they can win. It won't matter. They know that if they win, history will remember them as liberators, not aggressors.

But that was the crux of my point. If Germany is able to put France back on it's feet quickly, prevent them from losing their oversees possessions, basically status-quo minus Alsace-Lorraine, and promise them potential future GB possessions in Africa, what incentive does France have to kick off against Germany again? I don't see them having the stomach for another fight with the Germans for a least a decade.

As far as the US, if Germany "plays nice" with all of Europe (except GB) the American public is not going to want to prop up what they see as English colonialism. If the American public is seeing GB in a war with Germany with Germany not really fighting back, GB will not get help. Plus all the South and Central American nations will start to line up towards Germany if they see GB as the aggressor. GB already has an image problem in this region.

If Germany sits back for a while after making peace with Western Europe it will become very difficult for GB to have any kind of coalition because every nation will view it as GB just trying to protect or expand their Empire.

USSR would have to be scared shitless at this point. They are seeing all of Europe becoming one faction that does not look favorably towards Communistic regimes.

At least that's how I'd view it.
 
It's good to see Churchill still becomes the Prime Minister even when the different disasters take place here. That should make everything more interesting, because he will never surrender and will do everything possible to get the US in his side. Let's see if the will of the British people is strong enough to survive the finest hour here...

It's also benefitial for Germany that Petain still becomes the leader of the collaborationist regime (did it move its capital to Vichy?), because he's still seen as a respected and beloved war hero by the French.

As far as the US, if Germany "plays nice" with all of Europe (except GB) the American public is not going to want to prop up what they see as English colonialism. If the American public is seeing GB in a war with Germany with Germany not really fighting back, GB will not get help. Plus all the South and Central American nations will start to line up towards Germany if they see GB as the aggressor. GB already has an image problem in this region.

It's possible that South and Central America would like to ally themselves with Germany, but the US still has all the influence and virtual complete control over them. Granted, Operation Condor hasn't happened yet and the dictators aren't propped by the US, but the countries of the region are very dependant of the US, especially if Europe is at war. Whoever the US decides to align with, Central and South America will follow it. Not that anything of this makes any difference, of course, since the only nation that sent troops to any front was Brazil, but perhaps CrimsonKing has some plan we're unawere of.
 
Plus, if the British TRY to invade France they'll likely fail. Even the French on their own might stop them, and then there are the Germans who'll come to reinforce them quickly.

Also terror bombing is a BAD idea.
1 ) Waste of planes and pilots. Better to keep them for Barbarossa or deploy them against industrial and military assets
2 ) It would push the US to give more help to UK
3 ) It would terrify the British people yes, but also harden them and kill ANY chance of peaceful settlement (short of a successful Sealion, which won't happen).

Also, about the terms to give to NL, Belgium and France
1 ) France can part with Morocco (to Spain) and Tunisia and Djibouti (to Italy), and Indochina (to Japan). In exchange gaining Belgian Congo.

(Don't touch Algeria though).

French people won't be happy but...

2 ) If the Germans reduce their occupation to Atlantic / Channel coast, let the prisoners go home and postpone reparations it will count MUCH more than Morocco and Tunisia and Indochina.

It will even look like a good deal after such a catastrophic defeat.

3 ) Alsace-Moselle, Nice, Savoy, Corsica and whatever territory Spain occupied can remain occupied and be settled by plebiscite after the war.

Of course, the Axis powers can flood those regions with settlers.
And encourage any local German/Spanish /Italian-speaker to take their nationality.

They should do it QUIETLY though. With Axis and Vichy censorship preventing French newspapers from talking about "those Italian settlers who are flooding...".

When the plebiscite comes, they can rig it (if necessary). But not in an obvious way (like the Stalin plebiscites with 99% "yes"). Better to have results between 55% and 75% (depending the area), it will look much more BELIEVABLE.

It lets France save face while giving Germany, Italy and Spain what they want.

4 ) Then you can start Collaboration with a sound basis and without undermining the French government credibility.

5 ) France is useful as an ally. Belgium and NL are more useful as neutrals and economical (subservient) partners.

6 ) Belgium will lose Congo yes, it will sting. It's better if they lose it to FRANCE. Belgians will resent the French more than the Germans. Which helps Germany to dominate the European bloc.

Plus France is better placed to get Congo. Plus France is still neutral and not yet at war with Britain, so the Brits won't have legitimate reason to invade Congo.

NL will lose Indonesia to Japan.

Belgians and Dutch will accept it though because :
=> Economical collaboration (but no reparations)
=> Maybe have the Low Countries sell their navies (at reasonable price). It will help in the Med.
=> Military neutrality
=> No occupation.
=> Prisoners back

The Belgians and Dutch will be happy to get their prisoners back and their LAND back. And also their neutrality.

They will become economic partners like Sweden but on steroids.

7 ) The British pro-peace circles will get ammo.
"Wagner is reasonable, he treated very well France and Low Countries. Plus he didn't occupy Low Countries".

Having Germans at Antwerp was unacceptable to Britain but it won't be the case if Wagner plays well.

Anyway, Wagner has French coast to conduct submarine and aerial war, and don't even NEED bases or ports in Low Countries.

8 ) If Britain starts to bomb Belgian and Dutch industries, it will harm Churchill domestically (British opinion won't like too much outright bombing neutrals), and MASSIVELY harm British image in the US and world.

Same thing if the British ever try to invade Europe through neutral Low Countries.

Such an invasion attempt would fail, thanks to Belgian and Dutch armies, plus Wehrmacht coming FAST.

9 ) It will also help with the US opinion to give back their freedom to Belgium and NL.

Basically Wagner can
=> Have France as a useful neutral, and soon ally. While still satisfying German, Italian and Spanish claims in France proper (but later, after peace and "plebiscite"), and giving some minor colonies to Italy and Spain
=> Give Indochina and Indonesia to Japan (in exchange for later help)
=> Have the Low Countries as useful neutrals
=> Reduce your occupation zone to merely French coast (which is just as secure but FAR less costly)
=> Undermine the Interventionists in the US and the warhawks in Britain by looking reasonable.

France and Low Countries won't be happy at the territorial losses but WILL be happy to escape the TOTAL defeat nearly unscathed (instead of being crushed or even destroyed as countries). France will also gain Congo (nice bonus).

Oh, and Wagner should not annex Luxemburg now. It will still be there at the time of final peace, there is no rush.
 
Wagner seems too...practical to place much importance on things like that. I mean, it's probably there, but the patronage of the Fuhrer and the Nazi elite like IOTL isn't there. Considering how the TL has gone, I can just imagine Ahnenerbe trying to impress Wagner only to get laughed out of the Chancellery.

There's enough time for philosophizing and building monuments after the war, when you can actually say you have something to think about or commemorate. Sieg Heil is still in use, while Heil Hitler has probably been replaced with Heil Wagner. Or, seeing as Wagner doesn't seem as...self-obsessed as Hitler was, it could just be Heil based on the previous update, with the office of the Fuhrer probably getting more importance as opposed to the man sitting on it. Or something like that...
 
It's a great update, and I can't wait to see the next advances of your brilliant AH.

Regarding the immediate development of the war, it would not surprise me greatly if Churchill decides to invade Portugal -although only really happen in the Azores and Madeira, where it could establish air and naval bases solid near the Strait of Gibraltar, being perfect to replace a fallen Gibraltar in the war routes of British ships; while British developing a plan to assault the Canary Islands (idea supported by the Spanish Republican exiles in London, probably even led by former prime minister during the SCW, the Canarian Dr. Juan Negrin)-, which could trigger a Spanish invasion of Portugal -in OTL, Franco planned the conquest of Portugal, setting 1945 as the year that the invasion would restore political unity to the Iberian peninsula would be militarly feasible for Spanish armed forces-, supported widely by Axis members and fanatical Portuguese Falangists, and a British invasion of Portuguese colonies (Portuguese Guinea and Cape Verde would fall into the hands of the British troops stationed in Gambia; Cabinda, Angola and Mozambique would fall into the British troops stationed in Rhodesia and Namibia; Goa would be integrated into the British rule of India; and Portuguese Timor would be integrated into the Australian rule; instead, I think Sao Tome and Principe would fall into the hands of the Spanish troops stationed in Spanish Guinea).

Plus, if the British TRY to invade France they'll likely fail. Even the French on their own might stop them, and then there are the Germans who'll come to reinforce them quickly.

Also terror bombing is a BAD idea.
1 ) Waste of planes and pilots. Better to keep them for Barbarossa or deploy them against industrial and military assets
2 ) It would push the US to give more help to UK
3 ) It would terrify the British people yes, but also harden them and kill ANY chance of peaceful settlement (short of a successful Sealion, which won't happen).

Also, about the terms to give to NL, Belgium and France
1 ) France can part with Morocco (to Spain) and Tunisia and Djibouti (to Italy), and Indochina (to Japan). In exchange gaining Belgian Congo.

(Don't touch Algeria though).

French people won't be happy but...

2 ) If the Germans reduce their occupation to Atlantic / Channel coast, let the prisoners go home and postpone reparations it will count MUCH more than Morocco and Tunisia and Indochina.

It will even look like a good deal after such a catastrophic defeat.

3 ) Alsace-Moselle, Nice, Savoy, Corsica and whatever territory Spain occupied can remain occupied and be settled by plebiscite after the war.

Of course, the Axis powers can flood those regions with settlers.
And encourage any local German/Spanish /Italian-speaker to take their nationality.

They should do it QUIETLY though. With Axis and Vichy censorship preventing French newspapers from talking about "those Italian settlers who are flooding...".

When the plebiscite comes, they can rig it (if necessary). But not in an obvious way (like the Stalin plebiscites with 99% "yes"). Better to have results between 55% and 75% (depending the area), it will look much more BELIEVABLE.

It lets France save face while giving Germany, Italy and Spain what they want.

4 ) Then you can start Collaboration with a sound basis and without undermining the French government credibility.

5 ) France is useful as an ally. Belgium and NL are more useful as neutrals and economical (subservient) partners.

6 ) Belgium will lose Congo yes, it will sting. It's better if they lose it to FRANCE. Belgians will resent the French more than the Germans. Which helps Germany to dominate the European bloc.

Plus France is better placed to get Congo. Plus France is still neutral and not yet at war with Britain, so the Brits won't have legitimate reason to invade Congo.

NL will lose Indonesia to Japan.

Belgians and Dutch will accept it though because :
=> Economical collaboration (but no reparations)
=> Maybe have the Low Countries sell their navies (at reasonable price). It will help in the Med.
=> Military neutrality
=> No occupation.
=> Prisoners back

The Belgians and Dutch will be happy to get their prisoners back and their LAND back. And also their neutrality.

They will become economic partners like Sweden but on steroids.

7 ) The British pro-peace circles will get ammo.
"Wagner is reasonable, he treated very well France and Low Countries. Plus he didn't occupy Low Countries".

Having Germans at Antwerp was unacceptable to Britain but it won't be the case if Wagner plays well.

Anyway, Wagner has French coast to conduct submarine and aerial war, and don't even NEED bases or ports in Low Countries.

8 ) If Britain starts to bomb Belgian and Dutch industries, it will harm Churchill domestically (British opinion won't like too much outright bombing neutrals), and MASSIVELY harm British image in the US and world.

Same thing if the British ever try to invade Europe through neutral Low Countries.

Such an invasion attempt would fail, thanks to Belgian and Dutch armies, plus Wehrmacht coming FAST.

9 ) It will also help with the US opinion to give back their freedom to Belgium and NL.

Basically Wagner can
=> Have France as a useful neutral, and soon ally. While still satisfying German, Italian and Spanish claims in France proper (but later, after peace and "plebiscite"), and giving some minor colonies to Italy and Spain
=> Give Indochina and Indonesia to Japan (in exchange for later help)
=> Have the Low Countries as useful neutrals
=> Reduce your occupation zone to merely French coast (which is just as secure but FAR less costly)
=> Undermine the Interventionists in the US and the warhawks in Britain by looking reasonable.

France and Low Countries won't be happy at the territorial losses but WILL be happy to escape the TOTAL defeat nearly unscathed (instead of being crushed or even destroyed as countries). France will also gain Congo (nice bonus).

Oh, and Wagner should not annex Luxemburg now. It will still be there at the time of final peace, there is no rush.

It's a nice great planning. I agree with you in most of your post, but I would add two changes:
  • Algeria is considered a French metropolitan area susceptible of a subsequent Spanish/Italian annexation after the war, due to an earlier occupation of part of French Algeria during the European war -established by the French armistice because Franco and Mussolini alleged to protect many Spanish/Italian citizens in these areas (Oran region for Spain, Constantine region for Italy).
  • If Italy immediately receives two French strategic colonies after the French armistice, at a minimum, Spain should receive a small extension of the Spanish Guinea and the promise of acquiring the French colonial territory forming the Greater Morocco -ie, Mauritania, the Malian regions of Gao, Kidal and Timbuktu and the Algerian regions of Bechar and Tindouf-, plus the possibility of annexing the Algerian province of Adrar, El Bayadh, Naama to establish a more defensible border in case of a Spanish annexation of the region of Oran.
    • This could be seen as a Spanish justified claim, for the eyes of the Nationalists and the Axis, as a form of French compensation for facilitating arms smuggling that benefited Republicans during the SCW, needlessly prolonging it.
PS: Although it is a nice touch that Wagner delays the payment of French reparations after the war, in order to join the new French State to Axis, I think it is necessary to establish that the French subsequently shall bear the total cost of the German occupation and establish guarantees for it -for example, Petain is forced to recognize German as guardians of French gold reserves-.

PS2: By the way, I have some doubts about some customs that socially taken root in OTL Nazi Germany. For example, the Nazi salute is still Heil Hitler! or it was changed to Heil! or Heil Wagner! or Sieg Heil!?

And continue the Nazi plans to rebuild Germany and its cities by great monuments and avenues, as the projected called Germania by Albert Speer? After all, this was constantly encouraged by Hitler, who was a frustrated artist. And regarding this, we must bear in mind that the beginning of the Europea war has been delayed to 1941. Therefore, it exists the possibility that any of the projects megalomaniacs imagined by Speer could have built before the war.

And what is the social impact of the composer Richard Wagner and his music with this alt Nazi Germany led by a Nazi named Robert Heinrich Wagner? Adolf Hitler was an admirer of Wagner operas and saw an incarnation of his own vision of the German nation. There is still debate about how they might have influenced the views of Wagner in the Nazi thought. The Nazis used the thinking part of the composer who was useful for their propaganda and ignored or suppressed the rest. Although Hitler himself was an ardent follower of Richard Wagner, much of the Nazi hierarchy it was not and they were deeply resented the opportunity to attend these long epics because of their insistence.

There is evidence that Wagner's music was used in the Dachau concentration camp in 1933-1934 to "reeducate" political prisoners by exposure to "national music". However, there is no evidence to support the claim, sometimes sustained, that his music was used in Nazi death camps during World War II.

PS3: I have problems with my computer and have appeared while I editing this post. For this reason, I have been forced to reedit it.
 
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Well, a small extension of Spanish Guinea is probably no problem.

Giving Spain and Italy bits of Algeria is really too much since
1 ) It was seen as metropolitan France
2 ) I doubt Italy had the time (and enough success) to seriously penetrate in Algeria. I doubt even more that they took Constantine.
3 ) I'm even more sure Spain didn't manage to reach Oran or take West Saharan Algeria. Spaniards would have been lucky to take French Morocco (when their participation in the war was so quick).

The 2) and 3) apply to Mauritania and Northern Mali as well.

Having Spain annexing Andorre, occupying French Basque and a bit of Roussillon, and gaining Morocco and a bit of Guinea is already much.

If you ALSO give them Mauritania and Mali, it will be humiliating for France (since the Spaniards didn't take those lands, it would be unearned).
Even worse if Spain and Italy gain Algerian land.

On top of the humiliation, there would be the feeling that the French empire is carved. Especially as they will likely lose Tunisia Djibouti and Indochina too.

Plus French people likely still rabidly hate Germany. That might change if Wagner plays well but for now they hate Germany.
They probably hate even more Italy (the former ally, ie turncoat) and Spain (who attacked when France was down). Plus being defeated by SMALLER powers like Italy and (worse) Spain STINGS.

All of that put together might undermine Collaboration and Petain regime. Push French population to resist or oppose collaboration out of pride. Worse, push parts of French EMPIRE to defect to De Gaulle.

If the Spaniards want THAT BADLY Mauritania and Mali, it can wait for the final peace. And even then it might be better if Spain BUYS those colonies. And only if France gets enough British colonies in return.

While Algeria (even at final peace) should be a big no-no.
At the final peace, if Benny wanted Constantine that badly, just give him Syria and Lebanon (MUCH less important to France).

And it's likely Benny renounces his claims on Algeria. After all, if everything goes well, he gets Greece, (most of) Yugoslavia, Tunisia, Egypt, Palestine, Transjordania, Iraq (maybe in condominium with French and Germans). Possibly Sudan, British Somalia, Syria and Lebanon. So renouncing any part of Algeria will be feasible.
 
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