The Butterfly Effect: A British AAR

Chapter XLII: Peace Is More Than The Absence of War.​

The Valletta Peace Conference can be summed up an attempt by the Foreign Office to do the impossible; achieve Britain's war aims without giving the Italians' cause or justification for seeking revenge. Quite apart from the obvious problem with that objective, if you take something away from someone they are going to want it back, Italy had established a reputation as notoriously hard to placate even in victory. Objectively Italy had emerged from the Great War in the strongest position of all the European Allies; despite battles with names such as 12th Isonzo casualties, both total and as a proportion of population, had been far lower than either Britain or France and, as such, she had avoided both the 'hollow' classes of France and the trauma of the 'Pals' battalion losses suffered by Britain. Moreover, unlike France, Italy's age old enemy, Austria-Hungary, had been broken up with Austria herself falling in the Italian sphere of influence, not to mention the annexation from much of "unredeemed Italy" from the dismembered empire. Despite all this many post-war politicians referred to the 'mutilated victory' and focused heavily on the Allied 'betrayal' over promises about the fate of the Dalmatia coast and lack of support over the annexation of Fiume. With such a reaction to a victorious treaty it is clear that nothing but the most accommodating of treaties would be well accepted, especially as the Italian mainland had not been occupied.

Such a peace deal was, however, never going to be offered by Britain and the Dominions, regardless of their own aims and ambitions there was the memory of Georges Clemenceau, thrown out by the French public for 'being soft' on Germany at Versailles, always lurking in the minds of the political leadership. Moreover, while the war may have been stalemated it was a stalemate in the Empire's favour, Italian North Africa was occupied, the forces in Italian East Africa would soon be starved out, Rhodes and the Dodecanese had fallen to amphibious assault and the Regia Marina had been decisively smashed. In the longer term the decisive population, economic and industrial advantages all lay with the British Empire, something both sides were keenly aware of.


Although the formal peace talks only began at the beginning of May, for the Foreign Office preliminary talks had started the moment the cease-fire was agreed. However these talks were not with Italy, but with the Dominion representatives and other government departments over what to demand and what to concede at the negotiating table. It was agreed by all that the peace should not include a war guilt clause and should be a 'once and forever' treaty with no lingering commitments or future changes, both seen as critical mistakes in the framing of Versailles which allowed resentment to fester for years after the treaty. While this went against the earlier Australian demand for an imposed moratorium on post-war Italian battleship production it was recognised that banning Italy from publicly rebuilding her fleet would only motivate her to do in secret. However the Australians did request compensation for dropping that aim; a demand for the remaining heavy units of the Italian fleet to be transferred to Empire control, doubtless hoping they would eventually make their way to the Royal Australian Navy. It was also agreed to leave negotiations about what happened to territory acquired from Italy until after Valletta, thus bypassing the row between the Indian Office and the Foreign Office over direct occupation vs League of Nations mandate vs client state. This led to the decision that rather than peace and de-militarisation for East Africa the Empire should demand the annexation of Eritrea and Italian Somaliland, not so much for the negligible value of the territorial gain but to remove the Italian threat to one end of the Red Sea and as part of the drive to avoid imposing long term conditions. This left the revised peace aims as;

• Annexation of Italian North Africa, Italian Somaliland, Eritrea and the islands of Rhodes and Dodecanese.
• The transfer of remaining heavy units of the Regia Marina as reparations.

As would be expected these aims did not go down at all well with the Italian government; the territorial terms were little more than a recognition of the military situation but meant the end of Italy as a colonial empire. While the Italian Empire was, by some margin, the least respected in Europe, it was widely ridiculed as consisting of little but sand and angry natives, it nevertheless an empire, one of the pre-requisites to Great Power status and publicly touted as Italy's pass to the top table of international diplomacy. Privately, however, it was recognised by much of the Italian elite that in practical terms the Empire was more trouble than it was worth, having neither the valuable resources of the Belgian Congo or the Dutch East Indies or the globe spanning positions of the Portuguese possessions. Their one possible trump card, the threat to the British link to India through the bases in Eritrea and Italian North Africa, had been discredited during the war; 'strategic' harbours were useless without a powerful navy to use them, something Italy now comprehensibly lacked.

For all that there were still voices arguing for a continuation of the war, mainly Il Duce and the die-hard elements of the government, but significantly the 'Quadrumvirs', the men who had lead the March on Rome while Il Duce had stayed behind in Milan, wanted peace. That group, Marshal of Italy Emilio de Bono, Marshal of the Air Italo Balbo and Governor-General Cesare de Vecchi, could call upon wide support from the armed services and the wider Fascist movement and, despite having been isolated by Mussolini and sent to distant postings, were a powerful force on the Grand Fascist Council. Uniting behind Marshal Balbo, who as an Anglophile had never been keen on the war, the group had ignored Mussolini's orders and returned to Rome to ensure the Grand Fascist Council sued for peace. Il Duce, faced with such an array of opposition on his own Grand Council, not to mention the harsh reality that even if Italy did fight on there was no possibility of regaining her lost possessions, only the risk of seeing Sardinia, Sicily or even the mainland invaded, bowed to the inevitable and conceded the the end of his 'New Roman Empire'.


In comparison to the territorial negotiations the talks about the fleet reparations were far smoother thanks, in part, to some cunning negotiating tactics from the Foreign Office. It was realised that insisting on the vessels would only make the Italian delegation dig their heels in and, more seriously, act as an impetus for post-war naval re-armament. The solution therefore was to make a demand for a vast sum of reparations, a thousand million Lira, in cash and then, under Italian 'pressure', fall back to accepting a lesser sum in kind. The master stoke was letting the Italians use the vessels 'purchase price', i.e. the cost when new, and not their actual value, which was far lower after years of service and battle damage. Thus the Italian delegation was able to report a double success, driving a hard bargain by reducing the value of reparations to a notional 700 million Lira and paying that off with vessels worth a fraction of that, while the British delegation left with what they wanted in the first place. It is a mark of the success of this ploy that the reparations section of the negotiations escaped the charges of 'unfairly onerous' and 'an insult' that were levelled at the territorial clauses.

The reaction to the treaty was, unsurprisingly, most intense around the Mediterranean where the balance of power had fundamentally altered, much to the advantage of most of the nations affected. This was not always reflected in the public reactions however, the former Italian Empire had been coveted by various nations; Greece saw Rhodes and the Dodecanese as a natural part of her archipelago, France saw Libya as a way to extend her influence into the central Mediterranean and could see in Italian Somaliland/Eritrea a key to influence over the Red Sea and an Indian Ocean port en-route to Indo-China. The British success therefore strengthened the hand of the 'hawk' lobbies of those nations who had argued for joining the war, precisely to gain such spoils. However, as an ironic corollary, it weakened the re-armament arguments made by the same people, with the Regia Marina sunk and much of the Regia Aeronautica destroyed on the ground in North Africa or lost when East Africa surrendered Italy was no longer such a threat. Dealing with those nations less pleased with the outcome Austria and Albania stand out, as part of Italy's 'sphere of influence' their fate was tied to that of Rome; Albania feared greater interference from an Italy anxious to re-assert itself while Austria saw only the weakening of her strongest bulwarks against a forced 'Anschluss' with Germany. Such a conclusion had also been reached in Germany herself, the Foreign Ministry seeing the possibility of turning the defeat of a fellow fascist state to the Reich's advantage. It is also worth noting the muted reaction from the Popular Front government in Spain, unaware of how close Italy had come to supporting an army coup the peace treaty was not considered important news in Spain, particularly given the rising internal problems after the elections, the same problems that had driven the armed forces to the point of rebellion.

To deal with the remaining Great Powers, the news was greeted with concern in the Soviet Union, while capitalists fighting fascists was notionally good news the British victory was considered a sign the West was not as decadent and cowardly as previously hoped. In the United States the defeat of Italy was not big news, competing as it was against the run up to convention season and the prospect of the first genuine three horse race for the Presidency since Theodore Roosevelt's run for the Progressive Party in 1912. The Japanese reaction was mainly internal, publicly the government said little beyond acknowledging the facts. In private however the peace deal became another strand to the epic policy debate at the heart of the military leadership, a debate that had started after the aborted London Naval Treaty talks. The spark for the debate had been the exposure of the extreme weakness of the US, the discovery she had not built to her tonnage limits had confirmed the reports about the dire straits of the US economy. This was contrasted against the surprising strength of the British, the victories of the Royal Navy had forced a reappraisal of the threat she posed to Japan, particularly in light of the expected re-deployment of forces from the Mediterranean to the Pacific. While staff officers poured over the operational lessons to be learned the highest echelons were in turmoil as the various factions assimilated the new situation and how it affected their plans to lead Japan, and themselves, to greatness.