WI: Free Italy - a.k.a. Kingdom of Italy in exile as an Allied nation

01 - Prelude & Context
After the declaration of “non-belligerence” in September 1939, Italy is facing more and more pressure to join the Germans in War. Wehrmacht successes are pushing more and more the fascist establishment in the arms of Hitler, with Mussolini meeting Hitler at Brenner Pass on March 18th, 1940, agreeing with Hitler that “Italy will join at the opportune moment”.

Italian military was deeply unready to participate in a modern war: the previous conflicts with Ethiopia and the involvement in Spanish Civil War bled Italian strategic reserves dry. The Army was experiencing the reorganization to the binary system (Pariani reform), in which a Division was now composed just by two regiments, creating a paper-tiger 75-division strong army. Majority of the units were not properly equipped and trained, the armored and artillery complement to the Army were insufficient; CV-35 tankettes were already obsolete while the artillery, was really in bad shape both at divisional and battalion level. Moreover, Italian division firepower was just a fraction of both the Wehrmacht and of the Allied divisions.

The Royal Navy was a modern force to be reckoned in the Mediterranean, countered by logistical difficulties (e.g. lack of fuel to operate its own battleships), missed chances (radar technology appliance) and organizational errors (e.g. lack of carriers and coordination with Royal Air Force).

Royal Air Force, which was deemed as the most fascist armed force, suffered heavy losses in trained personnel and materials during the Spanish Civil War and reinforced the idea of superiority of C.R.32 ed S.M.79 which indeed were already obsolete. Despite the Programma R (renewal program), the efforts were badly allocated in too many different designs, with excessive specialization and the evident disproportion between fighters and bombers. The doctrine was also in bad shape, with no indications for air-to-sea attacks, and the bad compromise between Douhetist and Mecozzian approach to Air Power.

King Victor Emmanuel III was aware, thanks to his correspondence with Marshal Badoglio, of the Italian armed force unpreparedness. Moreover, VE III deeply loathed Hitler, hating the idea of having signed the Racial Laws in 1938 and its relationship with Mussolini was more and more strained. The Minister of Royal House Acquarone, under VE III’s order, begin to contact more moderate and germanophobic gerarchi like Count Ciano (Mussolini’s son in law and Foreign Minister), Marshal Balbo (Lybia Viceroy) and Grandi (President of Camera dei Fasci e delle Corporazioni) to soften up the more war-like mind of Mussolini. Ciano began to talk with Viscount Halifax, which expressed the will of British Empire to have Italy on its side against the Germans. British were also willing to cede some colonial holding and push the French to accept some metropolitan territory losses to Italy (e.g. Corsica) or colonial ones (e.g. Tunisia). Balbo already expressed in 1939 its disapproval of Mussolini’s subservience to Hitler (“You will all wind up shining the shoes of the Germans!”) met with Hitler’s advice to the Duce of removing him (“no Gauleiter would speak up to me in this way”).

The swift German invasion of France, and its following fall, emboldened the interventionist factions in the Fascist establishment, led by the Duce himself. This escalated quickly when in the Spring of 1940 the Duce was more and more prone to Hitler’s request to join in. “I only need a few thousand dead, to be able to sit down as an ex-belligerent at the negotiating table”, this were the Duce’s words. A secret memo from Mussolini was also sent to all the Chief of Staffs, to the King, to the Italian Africa Minister and to the PNF Secretary on March 31st about the will to join Germany in War.

This moves promptly alarmed the Royalist faction and the neutralist faction in the Fascist Party. Acquarone and VE III plot began to proceed. Moreover, Pope Pius XII, sent a message praying Mussolini to stay out of the war, enlarging the neutralist front. Both Roosevelt and Churchill expressed via several messages in April-May their stance, asking Italy to remain neutral. OVRA’s Head, Mr. Guido Leto, reported to Mussolini that the sentiment about war was of concern of missed advantages in case of a full German victory without Italian intervention. The report also contained the increasing, despite “minoritarian”, neutralist sentiment in the public.

On May 28th, Mussolini called a meeting of the Chief of Staff of Royal Army, Royal Navy and Royal Air Force (Badoglio, Cavagnari and Pricolo) communicating that Italy will have to join the Germans on Wednesday 5th June and the Army will have to mount an offensive against France. Mussolini asked General Ubaldo Soddu to talk with the King for the formalities and the required transfer/joining of Mussolini as Supreme Commander of the Armed Forces. Soddu, himself a part of Acquarone – VE III plot, called in Count Ciano and Balbo, who had still some strength in the PNF.

Immediately, the Carabinieri commands received the orders to neutralize hardcore fascists. Marshal Badoglio himself begin to contact the military leadership, deeply Royalist, to get rid of hostile MVSN and CC.NN. complements in the Army. Mussolini, deceived by Soddu, asking him to go to Villa Savoia to meet the King to discuss about War Plans and to receive from the King the complete command of the Armed Forces.

Mussolini rushed to Villa Savoia to just find the King in his gardens, softly telling him that he was sacked, and that “the small folk call me the Soldier King, because of Piave victories, because of Vittorio Veneto... You promised me the Vittorio Veneto’s Italy in 1922, what you didn’t tell is that you were for real in this, with the country shattered by war, with families missing their fathers, mothers weeping on their children’ coffins. I cannot allow this, Duce.”

Mussolini was shocked and arrested by Carabinieri, while the King immediately called Marshal Badoglio, asking him to take charge of the Government. Balbo, according to the plot, have just landed at Urbe Airport from Lybia to be the “fascist clean face” to keep calm the Blackshirts.

The very same day, on Friday 31st May, the EIAR interrupted its transmissions to communicate that:

«Sua Maestà il Re e Imperatore ha accettato le dimissioni dalla carica di capo del Governo, Primo ministro, Segretario di Stato di Sua Eccellenza il Cavaliere Benito Mussolini, e ha nominato capo del Governo, Primo ministro, Segretario di Stato il Cavaliere, Maresciallo d’Italia, Pietro Badoglio».

This is the first part of a ATL in which the Italian entry in WW2 at the side of Germany is stopped by a stiffer VE III. The idea is to explore a semifascist, militaristic regime on the side of the Western Allies and its long term implication on Italian, European and African politics. Please, feel free to reply and correct some of my blunders as I'm just an amateur and not an academic.

I apologize in advance for grammar mistakes, English isn't my native tongue.
Piave92
 
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Sounds like a good start. Is Italy actually going to fight against Germany, then? But it's still extremely unprepared...
 
Ok, Benny is now arrested; the army and the navy are royalist loyalist and the air force while fascist leaning will not have the capacity or the will to even think to a countercoup and even the fascist party will be deeply divided with big wigs like Ciano and Balbo supporting the king...so while i expect a period of violence and troubles it will short and it's very probable that the hardcore fascist like Farinacci will stay quiet to save their skin and accept the nice retirement package.
In general the italian population at the moment have an opinion regarding the war very similar at the one of 30 years before: we prefer stay out of the mess.

While the army is unprepared to a general offensive war, mountain defense of the national territory is what's is equipped and trained to do while is true that a flanking manouver through Jugoslavia to attack the Vallo Orientale will mean hit the weak point of the italian defense but while this is not something like an attack to the Occidental and North defense line, that's basically a 'confortable and safe suicide mission', the defense line against Jugoslavia still exist, still is full of bunker and secure position in a mountain line so i expect that the German will not have an easy passage in the zone and that the italian army will have time to organize.
Even when breached the German army will have a relative easy life only till hit the Appenini, after that the offensive end and all the glorious panzerdivision of the furher are basically usefull as a third nipple
Plus if Italy side with the allies or even neutal, hello all the logistic problem in obtain supply magically disappear in a second

Now look for a moment to the reaction on the world:

UK - at the moment Churchill and the rest of the British goverment are waiting for the developement of the situation and ready to start dancing the conga and drunk themself almost to oblivion for the happyness. A neutral Italy (and one headed by people that don't like Germany), especially in this situation, is a god send and it mean that no resources will be needed in other front (OTL North and East Africa) plus the Mediterrean is open so the general supply (and financial) situation of Great Britain will be better than OTL. Hell Regia Marina staying out mean that the British can avoid the panic attack to the French Fleet as they feare a German-French-Italian invasion fleet, and so maybe catch a colony or two more than OTL.
Plus if Italy is invaded later (as the title imply) the force that has in OTL been sent in Greece can be used there, boosting italian capacity

Germany - deeply concerned, not only because this developement can be the prelude to an hostile power on the souther border that can used as a stage for a German invasion or for bomb Pleosti but also because Adolf see Benny as a 'friend' and 'mentor'. Naturally any invasion will happen before Barbarossa aka the true Nazi objective and can take the place of the invasion of the Greece and Jugoslavia and the partecipation of the Afrika Korp to the North african campaign...unfortunely any invasion of Italy will suck much much more resources than the OTL and making ITTL Barbarossa more difficult, plus depending on when any war happen all the luftwaffe assets used in Italy will not used during the battle of britain.

Japanese: their entire warplan has gone to the toilet but they still don't know it...have fun as ITTL they hardly face third rate troops with obsolete equipment but in all probability something of more challenging
 
I don't know if this has ever been discussed: with a neutral Italy, would Germany feel the to expand control over France, to at least try to cripple the UK's suply line from Asia? Even Hitler can't avoid recognizing the boost to the UK that free use of the Suez Canal means. The only realistic way to stop (or, at least, mess with) this line is to do something about the Med. U-boats via Gibraltar is not really feasible; without Italy, even if they cross the Gib they have no base for support... unless Germany grabs the south of France...
 
I don't know if this has ever been discussed: with a neutral Italy, would Germany feel the to expand control over France, to at least try to cripple the UK's suply line from Asia? Even Hitler can't avoid recognizing the boost to the UK that free use of the Suez Canal means. The only realistic way to stop (or, at least, mess with) this line is to do something about the Med. U-boats via Gibraltar is not really feasible; without Italy, even if they cross the Gib they have no base for support... unless Germany grabs the south of France...
Any subs used in the Med is not used in the Atlantic and time is needed to transport men and equipment (subs included) in any base in France (honestly we are talking about Toulon) and full occupation with the addition of Italy to busy in internal affair to intervene in the war can bring France to fight on
 
Any subs used in the Med is not used in the Atlantic and time is needed to transport men and equipment (subs included) in any base in France (honestly we are talking about Toulon) and full occupation with the addition of Italy to busy in internal affair to intervene in the war can bring France to fight on
And the OTL Italians did a number on British Submarines, now in an ATL with plentiful fuel , ASW would be even more effective.
 
What happens to all the imprisoned communists and dissidents?
The communist and socialist stay were they are, maybe the one that belong to the catholic (atleast the moderate and pro-monarchy) groups can receive the pardon of the king as a PR move and to have the support of the church in this peculiar moment
 
Assorted musings,

Neutral Italy means a great saving in shipping for Britain, the Cape route took an extra 2 million tons or so due to the longer transit Whilst the Germans can put U-boats in the Med, they still have to enter via Gibraltar ( even if based in Southern France ) so losses are likely to be heavy as per OTL.

Hitler seizing Southern France to do this however has very big butterflies, French North Africa is very likely to go Free French and any French Naval units that can flee will join the allies. This not only gives Britain more allied troops but North Africa was one of its main sources of Iron ore pre war. So it can trade Hurricanes for Iron for example rather than import US steel. Shorter shipping distance and helps the balance of trade.

Most of the British troops in North Africa came from the East Empire ( India, Australia, NZ, South Africa ) rather than the UK and the Mediterranean fleet was designed to pivot East if needed so Japan is looking at larger forces arrayed against it if it acts as OTL. One big win for the British is the T-class subs that did poorly in OTL in the Mediterranean due to being too big , would be operating in the environment they were designed for ( and unlike their US counterparts , they have working torpedoes ). Given the low margin for error the Japanese operated on , butterflies can quickly grow.

Invading Italy is a strange move by Hitler unless he thinks Mussolini can quickly and cheaply be put back in power. The real fight for him is in the East with the USSR and he was aware of his short window to do it before the weakening Stalin's purges of the Red Army caused unwound making it that much harder. Without allied Italian troops and the probable need to occupy Vichy, troop stretch is a big issue if he invades.

Now if Italy is invaded and the British forces get pulled in , it weakens Britain in the East in the air and ground but not at sea as its hard to see how Germany gets even to fight at sea with more than a few subs. Add in the French and Italian fleets doing most of the heavy lifting in the Med ( their units tended to be shorter ranged so less suitable elsewhere ) and Malaysia still looks likely for butterflies ( great reliance by the Japanese on amphibious assaults to flank positions as well as most supplies having to be shipped by sea. More RN units especially subs and a stalemate could occur. )
 

Stenz

Monthly Donor
It would be for the best if Benny goes on trial and is found guilty of treachery. Without Mussolini, it’s very unlikely the fascists would have a figurehead of sufficient stature to rally around for an attempted return.
 
Hello, I'm glad that so many people appreciate the topic. Several posts got definitely right on the possible evolution of ATL...

I expect to be able to finish the next update within today/tomorrow (I have to finish some research on the matter to be coherent with OTL and some pipe fixing to do at home, otherwise my girlfriend will shove the same pipes up my a.s :) )

Piave92
 
Your English is far better than 95% of Anglophones' any other language. Don't worry about it.
...a semifascist, militaristic regime on the side of the Western Allies...
seems rather sanguine. Italy in 1940 was (as noted) seriously unprepared for war even as an ally of triumphant Germany. Fighting against Germany would have been suicide - obviously so, after the quick destruction of France. Italy might eventually enter the war on the Allied side, but only after Germany is on the ropes and the Allies can provide lavish support and protection.

Even then, there would be little for Italy to gain and the costs and risks could be considerable, Furthermore, if "the Allies" are beating down Germany, then very likely "the Allies" include the USSR, and few in Italy would want to be associated with the Red Menace.
 
Your English is far better than 95% of Anglophones' any other language. Don't worry about it.

seems rather sanguine. Italy in 1940 was (as noted) seriously unprepared for war even as an ally of triumphant Germany. Fighting against Germany would have been suicide - obviously so, after the quick destruction of France. Italy might eventually enter the war on the Allied side, but only after Germany is on the ropes and the Allies can provide lavish support and protection.

Even then, there would be little for Italy to gain and the costs and risks could be considerable, Furthermore, if "the Allies" are beating down Germany, then very likely "the Allies" include the USSR, and few in Italy would want to be associated with the Red Menace.
From my impression, seem that Italy will not make the decision if enter the war or not but more react to the decision of other nations
 
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02 - King's Goverment and international reactions
Conspirators in Charge and King’s Government

Balbo, landed at Urbe Airport, hurriedly moved to Quirinale, for a high-level meeting with VE III, Marshal Badoglio, Count Ciano and Grandi. The conspirators begin their discussion with the report from Marshal Badoglio on the epuration of hardliners from Armed Forces: in a matter of hours, loyal Carabinieri forces, joined by Royal Army troops led by Royalist officers, managed to disarm CC.NN. legions in the Army. Royal Navy, still at anchor in major naval bases like Taranto, renewed its allegiance to the King without any issue. Royal Air Force, was indeed rowdier and more upset about Mussolini’s demise. Balbo declared that “it won’t be an issue once I’ve the power to take action officially”.

Count Ciano reported on the international situation: through the German Embassy in Rome, Von Ribbentrop was continuously calling the Italians for a clarifying meeting about Mussolini’s destitution and about the previously communicated date for entry in the War at their side. The British ambassador in Rome, Sir Loraine, relayed a message from Churchill that both expressed his own grief about Mussolini’s condition (Mussolini’s destitution was masked as derived from serious illnesses) and his own will to keep Italy out of war with vague promises of territorial rewards (e.g. British Somaliland, discussion on French colonial holdings…).

Grandi instead spoke about the feeling in the Party: National Secretary Ettore Muti, a rising star in Fascism, was neutralized, being a “man of action” and not an efficient bureaucrat. Both Starace (Mussolini’s sycophant despite the Duce himself despised him) and Farinacci were strictly surveilled. Orders of destitution hit several local ras and federali through the office of Muti. Grandi, when asked by Ciano how he managed to convince Muti to not release the Blackshirts in the usual bloodshed in the countryside literally answered: “Muti is a soldier, a daring and brave individual, I’ve offered him the role of Air Marshal”. Balbo, immediately enraged, as he was the only Air Marshal, was quickly stopped by VE III before he could finally lose its temper.

Gentlemen, now it’s the moment to throw away our own grudges among ourselves, Myself, the King, I’m the symbol of Nation, and, as a symbol of Nation, I won’t allow any bloodshed and infighting among Italians. Therefore, I ask you, Marshal Badoglio, to quickly instate a government of reliable and loyal persons in order to immediately stabilize the public opinion.

Count Ciano, unfortunately, you will have to work on thin ice, I confirm you as mine Foreign Affairs minister. You will have to progressively distance us from that Austrian fool. Have you ever heard of the artichoke politics? My ancestor Charles Emmanuel III told this centuries ago when my House was still straddling on medieval fiefs across the Alps, and now House Savoy rules an Empire, you will have to work step by step.

Marshal Balbo, you will be mine Minister of Interior and you will be also War Minister. You will have to oversee the transformation of fascist political organizations, to clean up the Party and the repressing machine will have to be put under your control. I want you to bring the Country stability.

Grandi, you will be substituted by Count Acquarone as President of Camera dei Fasci e Corporazioni, and you will be the new Secretary of the National Fascist Party. I want you to repeal immediately the Racial laws as Minister of Grace and Justice.”
VE III stopped talking.

Marshal Badoglio took the floor saying: “Your Majesty, what are we going to do with the Germans? They may be very angry towards us; they could try to reach to your person to… remove you… I suggest that Your Majesty and all the Royal Family transfer to a secure location…”.

“I will not abandon our People in the hour of need! I will stay in Rome, while my heir, Umberto, will tour the Empire to restore calm and remind that in this Empire, it’s House Savoy that is in charge, not any Party or person”.


The odd quadrumvirate left Quirinale palace, while the King prepared himself to a difficult radio speech on the very same day – June 2nd 1940:

“Italiani ed Italiane! Cittadini e cittadine del Regno d’Albania, delle Colonie, dell’Impero! Vengo, in quest’ora buia e difficoltosa, per mezzo della mia voce, nelle vostre case. Le precarie condizioni del Primo Maresciallo dell’Impero, Benito Mussolini, non mi hanno lasciato altra scelta che accettare le sue dimissioni da Capo del Governo e Primo Ministro. Ringraziamo il Cavaliere Benito Mussolini per il suo grande contributo nel sollevare la nostra Italia dalle ceneri, della radiosa vittoria della Grande Guerra, e mi ha donato un Impero. Tuttavia, mi sento in dovere di chiedere alla Nazione di supportarmi in questo difficile momento, orfani del Duce, nel guidare l’Impero e di sostenere, il mio governo, guidato da sua Eccellenza, il Maresciallo Pietro Badoglio. Io stesso, per grazia di Dio e volontà della Nazione, Re d’Italia ed Albania, Imperatore d’Etiopia, mi prendo la responsabilità, in quest’ora incerta, senza la guida del Primo Maresciallo dell’Impero, di dichiarare il perdurarsi dello stato di non belligeranza…”

--- TRANSLATION ---

"Italians! Citizens of the Kingdom of Albania, the Colonies, the Empire! I come, in this dark and difficult hour, through my voice, to your homes. The precarious conditions of the First Marshal of the Empire, Benito Mussolini, have left me no choice but to accept his resignation as Head of Government and Prime Minister. We thank Knight Benito Mussolini for his great contribution in lifting our Italy from the ashes of the glowing Great War victory and he gave me an Empire. However, I feel obliged to ask the Nation to support me in this difficult moment, orphaned by the Duce, in leading the Empire and to support my government, led by His Excellency, Marshal Pietro Badoglio. Myself, by the grace of God and the will of the Nation, King of Italy and Albania, Emperor of Ethiopia, I take the responsibility, in this uncertain hour without the guidance of the First Marshal of the Empire, to declare the continuation of the state of non-belligerence...".

Mussolini indeed, perfectly in shape, was detained in Lampedusa, strictly controlled by a company of Carabinieri. The change in regime was quite swift and average Giuseppe on the streets neither noticed real changes outside the repeal of Racial Laws and the softening of the fascist’s obligations (such as the mandatory membership to the Party to be a public servant or the nonsense Saturday rallies). Hardliner fascists were strictly overlooked by the repurposed OVRA, now in charge to monitor every possible menace to the new course of government, from either the antifascists and the hardcore blackshirts. New Badoglio government was still composed by a majority of Fascists ministers, joined by military and technicians, pursuing, under the astonishing diplomatic skills of Count Ciano to walk on a tightrope, without compromising with the Allies and without enraging the Germans, progressively distancing from the Steel Pact. Balbo, as new War Minister, was overloaded with tons of paperwork on the Italian military unpreparedness. After a few months of study, he removed Cavallero (Badoglio’s substitute as Chief of Staff) due to its ambiguous relationship with Ansaldo, substituting him with Soddu. Armed Force, were to be used only as a deterring force on the Alps and Vallo Littorio was immediately prioritized with the building of new fortifications in South Tyrol and Carnia. Grandi, managed to instate loyal federali in the majority of the PNF local organizations. In November 1940, the transition was almost completed.

Reactions in Berlin & international implications

The news of the removal of its mentor Mussolini from the role of Head of Government and First Marshal of Italy astonished Hitler. Despite diplomacy, led by Ribbentrop, was aligned on the status of the Italian turmoil in Spring and maybe also aware of the Royalist coup planning, Germany was caught a little bit out of guard.

In a high-level meeting the day after VE III’s radio speech Hitler lost his temper, calling for an invasion of Italy to reinstate his friend Benito as leader of Italy and literally “smash the head of that dwarf, friend of Jews, treacherous Savoy and eradicate its name from history”. Von Brauchitsch, Head of Oberkommando des Heeres, immediately replied that the Wehrmacht, despite the almost reached victory on France, was overstretched. Losses, although not heavy, were significant, Britain was not knocked off, Churchill now in charge and not willing to either negotiate or give up with the war. On Von Brauchitsch’s perspective, Germany would have to focus on bringing Britain on its knees and the preparations of Unternehmen Seelowe also showed that, even if all the available resources were thrown to its execution could be an unsuccess. Moreover, an invasion of Italy would distract precious resources for the planned invasion of USSR in 1941-1942.

At the moment, Hitler decides wisely to not bother with Italy, while ordering Abwehr to immediately contact germanophile fascists and to identify Mussolini’s whereabouts. The armistice with France delivered a strong propaganda boost, with the signing of it in the same train wagon of the surrender in 1918. Hitler was ecstatic. Marshal Petain will lead a rump French State from Vichy, while the Germans occupied the entire country with strong garrisons. French reaction to the occupation was harsh, collaboration was still not so common and Petain was trying to rebuild France from the foundation.

The British attack at Mers-el-Kebir, who almost annihilated the French fleet at anchor, enraged the French who actively bombed Gibraltar in retaliation and broke off diplomatic relationship with the British Empire. Churchill, still not trusting the new Italian regime to stay out of war due to Ciano’s double-speak and fearing that a Franco-Italian navy may allow the Germans to mount an assault on Britain, gave the order. This was a serious mistake, as the continuous British tentative to boost the small Comité français de la Libération nationale, led by General De Gaulle, in the French colonial holdings, resulted in direct confrontations with Vichy France troops.

After the amphibious attack on Dakar in October, repelled by Vichy French troops, French public opinion began to view the British as enemies and menacing the Empire and France itself. This feeling was strongly reinforced by the daring British night raid on Toulon, on November 11th (ATL equivalent of Taranto raid), that managed to destroy the majority of the Marine Nationale.

In a diplomatic masterpiece, Von Ribbentrop and Laval met in Paris: the Germans will take over the control of the remaining French Fleet and naval bases in both the Mediterranean (Toulon, Aleria…) and Atlantic while they retreat from Southern France and allow Vichy to re-establish full administrative control on France. Von Ribbentrop remarks that if the French will continue to fight the British in the colonial holdings, further concessions would be made. A few months later, the Battle of Gabon sees the Vichy French garrisons defeating the Free French troops, with the capture of De Gaulle and his hanging as a traitor: France is on the path on becoming full Axis member when accepts the compromise with Japan about Indochina on December 1940 and officially declares war to the British Empire, met with the retirement of German garrisons (except for Channel, Atlantic and Mediterranean coasts) and a divided public opinion.

Yugoslavian Prince Regent Paul, started to rely more and more on German assistance to keep himself on the lead of his nation, shattered by confessional and inter-ethnic hatred. Irredentism on Italian Istria and Karst and the unsatisfying solution achieved for Fiume in 1924 with the Treaty of Rome fueled nationalism. Wisely directed by Prince Paul and supported by expert Germans propagandists, the Italophobia reached new peaks with the killing of several ethnic Italians still living in Split and Sibenik. In the Winter of 1940, secret encounters between German, French and Yugoslavian diplomats, begin to plot to seize parts of Italy in case of war against the new regime:

  • Germany would annex South Tyrol, Trentino and Friuli between the Tagliamento and Piave, including Trieste
  • France would annex Val d’Aosta and occupy Sardinia and Sicily
  • Yugoslavia would annex the entire Italian Istria, Fiume, Isonzo Valley and occupy Albania.
Churchill cabinet was still under strong pressure: the blunder against the French made a friend an enemy, dangerous one also. As the situation in the Battle of Britain was becoming less hard, a wave of optimism begins to diffuse. Churchill orders his new Foreign Minister, Anthony Eden, to offer to the Italians whatever they want to bring them on the British side of the War.

Again, feel free to correct me on both historical and grammar mistakes. What do you think ? I tried to put some pepper in with the British-French grudge going too far...
 
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Assuming Italy is invaded, which I think your title suggests, it will delay the invasion of the soviet union, although I doubt more than the invasion of greece and Yugoslavia IOTL. Would this coupled with more collaborationist friance help Germany in the east? Im also wondering if the oil in the gulf of guinea was exploitable in 1940, considering the vichy regime now controls gabon and cameroon. If so this will help Germany even more in the east.

Will strategic necessity require an invasion of greece in this scenario?

A nazi invasion of Italy will hugely reinforce the popularity of the fascist regime in italy and also reinforce its differences with nazism.

Great update!
 
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