In both WW1 and WW2 the Italians got hammered. Unfortunately for the Italians Mussolini didn't see the need to reform his army. What if he's smarter? What if he decides otherwise early on?
POD:
Mussolini decides, remembering the humiliating Italian defeats in the Great War, that reform is necessary. In a speach in 1925 Mussolini declares that Italy must and will be strong again and that the glory of the Roman Empire shall be restored. The Roman Empire will be back and and the Med will become an Italian lake and Mussolini lets the entire world know about it.
The Italian army gets trucks, tanks, armored cars, proper rifles, good artillery and machinegun battalions. Part of it is imported. The other part comes from the Italian automobile and arms industry which is increasingly getting subsidized by the Italian government. The Italian army becomes more mechanized slowly but surely. Because of this the need for fuel increases dramatically in the following years. The oil company AGIP sees an opportunity and starts drilling for oil and gas reserves in the Po valley in the 20s and in Libya in 1930. A system of promotion by merit instead of seniority is introduced so that by the start of WW2 at least part of the Italian officers have functioning brain cells. Despite Mussolini's pride Italy also enlists the help of foreign military instructors to train Italian conscripts and to teach them how to use the new equipment. Afterwards Mussolini totally denies this ofcourse.
The airforce in the meantime gets rid of its biplanes and tri-engined planes by the early 30s. They also put and end to the Douhet doctrine shortly thereafter. For their fighters and dive bombers Italian engineers more or less copy German and British designs (for as far as that's possible). After seeing what the German airforce did in Spain, the Italians start experimenting with co-operation between the Regia Aeronautica (RA) and the Regia Esercito (RE) with moderate succes. The Italian airforce isn't quite as good in terms of tactics as the Luftwaffe but it's getting there. The Italians get their first practice in Ethiopia (which falls in four months ITTL). The Italian tanks are shown to be at a reasonable level. The artillery corps is equipped with new 105 mm guns as their standard gun, and they're fire support proves devastating to the weak Ethiopian army. At the same time Italian dive bombers for the first time get a chance to prove themselves. They provide tentative air support to the advancing Italian forces. That is also succesful. After the initial successes the Italian pilots become bolder and more agressive. The Ethiopians have no response to this sort of violence. Only ten days before the Ethiopian surrender Mussolini orders the use of chloride and mustard gas as a show of power. It wasn't really necessary. Ethiopia might have lasted a few days or a week longer if Italy hadn't used gas. The Italian forces get some more practice in Albania which falls in one day (even faster than IOTL). Both the army and the airforce send observers to Poland when Germany invades in 1939.
The navy didn't see much action in WW1. Many didn't see the need for reforms. Nevertheless Mussolini comes with the grand scheme of building a powerful navy which, he boasted, would one day rule the Mediteranean sea. Several new battleships, cruisers, destroyers, pocket battleships and submarines are build throughout the 20s and 30s. The biggest of these new vessels were the Littorio-class battleships. With their 41.177 tons they were a violation of the Washington Naval Treaty. In the late 30s and early 40s the navy starts putting radar on its ships thereby making the Regia Marina much more effective. The world doesn't protest but only watches with growing concern. The fleetplan ended with the construction of three carriers which were finished in early May 1940.
By 1939 Italy is almost bankrupt due to the reforms. WW2 comes as a good opportunity to get some much needed plunder which Italy can use to pay its debts.
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What happens next? Is this plausible? Any comments are welcome. I'll make changes if necessary. If this is possible, then what happens to WW2?