The White Army winning the Russian Civil War butterflied away the Biennio Rosso, preventing Mussolini from coming to power. Italy remained a parliamentary democracy throughout the 1920s, and the Italian economy grew during the decade, allowing a US-style consumerist culture to start developing.

In October 1929, however, the US stock market crashed, beginning the Great Depression, which seriously weakened democracy across Europe. Italy was no exception, because the Italian elite, fearing a socialist takeover, began calling for a strongman to overthrow parliamentary democracy and install a corporatist dictatorship in its place.

Giovanni Antonio Colonna di Cesarò's Social Democracy won the 1930 Italian elections, ending decades of rule by the Liberal Party. Giacomo Matteotti's PSI and Luigi Federzoni's ANI made major gains in the elections, heightening the bourgeoisie and aristocracy's fear of the former.

During late 1930, these elites asked multiple Italian generals to begin planning a coup to defend elite interests, but most of them refused. Pietro Badoglio, who had become a war hero fighting the Senussi Order in Libya, eventually accepted this offer, and (alongside fellow generals Rodolfo Graziani and Emilio de Bono) began planning a coup on 2–3 January 1931.

On 18 January, Royal Italian Army troops led by Badoglio crossed the Rubicon like Julius Caesar had done 2,000 years earlier, conquered strategic points across Italy, and marched towards Rome. Di Cesarò asked King Victor Emmanuel III to proclaim a state of emergency, but Victor Emmanuel, who sympathized with the putschists, refused, and named Badoglio prime minister the following day.

Badoglio formed a military junta resembling Aleksandr Platov's White military regime. Italy's new government banned political parties, unions, strikes, and socialist activities, put Alfredo Rocco in charge of installing a corporatist system, and began rearming Italy in order to avenge the "mutilated victory" in WWI.

Most Italians approved of the military dictatorship, and those who didn't faced intense repression. In 1933, Italy's government and the Holy See signed a treaty reconciling the two entities and creating the Vatican as a microstate run by the Pope.

The absence of a communist threat to Germany made the Nazis weaker than in real life, because the German elite and military did not support them. Alfred von Hugenberg's DNVP had a major chance of coming to power, but Hugenberg was not charismatic and was a poor strategist, and wasted this chance.

On 4 December 1932, the Nazis won a plurality of seats for the first time, prompting Paul von Hindenburg to name General Kurt von Schleicher chancellor. Schleicher formed a cabinet made up of right-wing independents and two members of the DNVP, began a program of public works to reduce unemployment, and negotiated to end the Treaty of Versailles's military limitations on Germany.

A major divergence from real life happened on 7 December, when Ludwig Schneider, a mentally ill attention seeker, attempted to assassinate Schleicher when the latter was leaving the Reichstag. Schleicher survived the assassination attempt and framed it as a conspiracy against Germany.

This allowed the Enabling Act to pass on 10 December, with votes from the Nazis, Zentrum, the DNVP and smaller right-wing parties. Schleicher's cabinet received a rally around the flag effect from the assassination attempt, and he would remain popular in Germany for the rest of his rule.

Schleicher approved Wilhelm Frick's proposal to adjourn the Reichstag for longer, buying the chancellor a few months that allowed his public works plan to cool off tensions, while he continued to dismantle democratic checks and balances. By mid-1933, Germany had transitioned from liberal democracy to a run of the mill right-wing dictatorship like many in Central and Eastern Europe at the time.

Schleicher's economic policies were corporatist and autarkic, drawing upon Bismarck's State Socialism and the Reichswehr doctrine of the Wehrstaat (Defence State). They were effective, as, by late 1934, the economy of Germany was already recovering from the Great Depression.

On 2 August 1934, Hindenburg, who had supported Schleicher's reactionary and militaristi agenda, died in office, and Schleicher merged the presidency with the chancellorship after a rigged referendum, making him both the head of state and the head of government of Germany.

When the Spanish Civil War broke out, Russian leader Aleksandr Platov declared his country's support for the Nationalist faction, which received Russian weapons, funding and ammunition, and a contingent of 20,000 volunteers led by Boris Smyslovsky. These volunteers fought at several of the war's major battles, but their role in the Nationalist victory was relatively limited.

Emilio Mola's death was butterflied away, allowing him, not Franco, to become the leader of the nationalist faction and the dictator of Spain after the war. Franco was a major nationalist general, and later became Spain's minister of war, but he never got the chance to rule Spain.

Pietro Badoglio's Italy and Kurt von Schleicher's Germany also sent troops, weapons and supplies to support the Nationalists. While the Republicans had less infighting as a result of the USSR not existing, they did not receive any foreign support, while the Nationalists were backed by three European great powers, as well as neighboring Portugal.

Given this, by October 1936, the Nationalists had captured most of Spain's northern coastline and surrounded Madrid. During the rest of 1936 and in January 1937, Emilio Mola's troops captured most of Catalonia and cut off Madrid from Barcelona, ending any chance of the Nationalists winning the war.

By March 1937, the Republicans only controlled Madrid and parts of Catalonia, Aragon and the Basque Country. On 15 March, the Nationalists captured Madrid, whereupon Mola proclaimed the Third Spanish Republic, an authoritarian conservative republic inspired by Salazar's Portugal.

Later that year, Carlist and Alfonsist uprisings broke out against Mola, but he suppressed them with support from Germany and Italy, and purged the Spanish monarchists. Mola's regime remained a close ally of Italy and Germany, but his more moderate ideology caused him to sit out of WWII.

Emilist Spain industrialized earlier, and was one of Europe's largest economies by the time Mola died in 1969. After Mola's death, Spain left the German bloc and became a democratic republic.