A different Cold War

Perhaps just as screwed, if with different borders. Apart from that, Islamism probably gets to be just as big an headache, but Western Europe does not have a large and poorly integrated Muslim immigrant minority. Its role gets filled by Chinese and to a lesser degree Eastern European immigrants because of circumstances, so security concerns for TTL Europe in the face of the Islamist threat are substantially lessened and more or less the same as for the USA and the other Western countries. The partition of India does not happen, in this regard things for them may vary.

The Cold War unfolded in Europe with increasing intensity as growing evidence of the tyrannical, aggressive, and genocidal nature of Stalinism made the Western bloc more and more afraid of the Soviet threat. Antagonism with the USSR quickly made the Anglo-Americans bury their tentative plans for a global peace-keeping intergovernmental organization to replace the failed League of Nations. They instead set up the Atlantic Treaty Organization (ATO), a collective defense system and integrated military alliance of the USA, Britain, and the Dominions. It was soon expanded to include the Western European countries (except neutral Ireland and Switzerland) as their reconstruction and rehabilitation progressed. The defense pact also came to include most Latin American states, but they did not join the integrated military structure due to their peripheral position in relation to the Soviet threat and their marginal role during WWII. After the Sino-Soviet War, the organization grew to include Japan and Korea, which remilitarized under the control of the alliance. As a recognition of the growing role of Australasia and East Asia in the alliance, it changed its name to Global Security Organization (GSO).

The outcome of WWII and the pressure of the Cold War, with a widespread perception of the severity of the Soviet threat, caused the European integration process to take an accelerated and vastly successful course. A widespread consensus arose that European integration would be the best way to deal with the lessons of the World Wars, achieve lasting reconciliation between the European peoples, and withstand the existential threat of Stalinism. The process started in the late 1940s and early 1950s with the establishment of a common market; a pan-European military divided into national components at the battalion level with centralized military procurement and a common budget, arms, and institutions; and a supranational parliamentary government to give democratic oversight to the various components of European integration. The latter included a directly elected assembly ("the Peoples’ Chamber"), a senate appointed by national parliaments, and a supranational executive accountable to the parliament.

Creation of a common European army provided an adequate way to reconcile the need of adequate continental defense with the controversial rearmament of Germany and the other Axis countries. Creation of a single-market area considerably boosted the postwar economic boom triggered by reconstruction and US aid. Prosperity and awareness of the Soviet threat supported consensus to the European integration process until its apparent benefits caused it to develop a self-sustaining momentum. By the 1960s, the process had grown successful enough that it started to include free movement of people between member states; police, judiciary, and intelligence integration; an economic, monetary, and fiscal union; and an European Court of Justice. This second-stage development got finalized in the 1970s. At the same time, the originally distinct component organizations of the process, the European Economic, Defense, and Political Communities, were merged into the European Union (EU), which took an increasingly federalist character. The founding members of the three European Communities and later the EU were France, Germany, Italy, Spain, Portugal, the Netherlands, Belgium, Luxemburg, the Czech Republic, and Slovenia. They were later joined by Poland, Slovakia, Hungary, Croatia, Romania, and Albania after the fall of their Communist regimes.

The four Nordic countries (Iceland, Denmark, Norway, and Sweden) opted out of the European integration process and instead chose to pursue a parallel effort of their own. This eventually grew into the Nordic Union, a confederation that managed security, economic, and foreign policy matters of member states while leaving them autonomy in domestic affairs. Finland joined the NU after its liberation from Communism. Over time, however, economic, security, and judicial cooperation between the EU and NU intensified, affinities between the two systems increased, and a joint single market and open borders area was established. By the last quarter of the 20th century, the EU and the NU remained formally distinct but were usually seen and often worked as the sister halves of a greater whole. All EU and NU states were also ATO/GSO members; the pan-European army, navy, and nuclear deterrent grew into a second main pillar of the alliance alongside the US military, of broadly equivalent power.

The British - and by extension the Irish due to the Northern Ireland issue - decided not to join either project because of their increasingly federalist character. They instead deepened their ties with the USA and the Dominions, eventually leading to the establishment of a free trade area (the Atlantic-Pacific Trade Agreement, or APTA) between the USA, Canada, Britain, Ireland, Australia, New Zealand, Japan, and Korea. By the 1980s the EU underwent a further stage of integration that turned it into a federal union in all but name. It developed an European Constitution with a Chart of Fundamental Rights; an unified foreign policy; complete economic integration; a common European citizenship; standardized European welfare services; and a semi-presidential supranational government with a president directly elected by European citizens. A set of Pan-European political parties took shape that were organized on a continental scale on the basis of ideological affinity and common interests, dominated EU politics, and regularly contested European elections on the basis of supranational platforms. United Europe got widely recognized across the world as the sister superpower of the USA.

Further support to reconstruction of Europe according to the Western model and its supranational integration came from the utter discredit that Communism increasingly suffered after the war. Its causes were the USSR’s role during WWII, its aggressive actions in the Balkans, growing evidence of the Soviet purges and genocide thanks to refugees and defectors, and eventually the devastation of China. Just like Nazism and fascism, Stalinism and Marxism-Leninism came to be irrevocably identified in the Western collective consciousness with tyranny, aggression, and mass murder. Within a couple decades since the end of the war, pretty much all mainstream left-wing public opinion in Europe shifted to support democratic socialist parties and movements. The unions expelled communist sympathizers from their ranks and realigned with the social-democratic drift. Even in the surviving far-left fringe, support for various forms of anarchism largely came to prevail. Communists became as loathed and marginalized as neo-Nazis across the Western world.

In Asia the Communist victory in China initially helped the spread of Communist and radical-nationalist insurgency to Southeast Asia, greatly complicating its decolonization, but the Sino-Soviet split and war reversed the tide. Collapse of China deprived the Southeast Asian Communists and leftist nationalists of a vital source of support, and the fratricidal Sino-Soviet war discredited them. So the Western powers were eventually able to wipe them out and keep the region bound to their bloc through a mix of deal-making with moderate nationalist leaders and military and economic support to conservative forces. However elimination of Communist sympathizers in certain cases escalated to large-scale purges that caused considerable loss of life, such as in Indochina and Indonesia.

After decolonization, the region got divided in the states of Burma, Thailand, Vietnam, the Malay Union, the Indonesian Federation, and the Philippines. Thailand formed a confederation with Cambodia, Vietnam absorbed Laos, and Indonesia formed from the fusion of the Dutch East Indies, British Borneo, and Portuguese Timor. Collapse of China however brought a different source of instability, as millions of Chinese refugees flooded the Southeast Asian countries. Their relief severely strained the economy and public order of the region, and in most cases they got forced into slums, with anti-refugee violence becoming a common occurrence. To help combat the threats of Communism, regional instability, and China’s disaster, the Western powers sponsored the creation of the Association of Southeast Asian Nations (ASEAN), a political and economic organization of Thailand, Vietnam, Malaysia, Indonesia, and the Philippines.

Over time, however, the Chinese refugees problem considerably ameliorated since a sizable portion of them were gradually allowed to resettle in the Western countries. Over the next few decades, several millions Chinese immigrated to the Western world. Although their arrival did arouse some nativist backlash, general prosperity allowed their gradual integration, and the Chinese community largely developed a positive reputation as a hard-working, law-abiding, and well-educated ‘model minority’. Their presence turned out important for Europe also because in combination with immigration from Eastern Europe after the Revolutions of 1962 and the Eight-Week War it acted as a barrier to help prevent large-scale immigration from the Muslim world. If it had been allowed to form, a large Muslim minority in Europe could have quite possibly turned into a serious security issue for Europe once Islamism became a serious global problem in the last quarter of the century.

In comparison, Japan and Korea were spared the worst of the backlash from the devastation of China, mostly because Soviet Manchuria acted as a barrier. Their postwar reconstruction and development largely followed the successful European pattern, although it was significantly slower because of the damage caused by the American conquest. Nonetheless US aid and the drive of reconstruction fuelled a gradual but robust postwar recovery and economic boom that established them as industrialized powerhouses. The looming Soviet threat, prosperity, and the sobering example of China gradually helped both peoples to bury resentment for the past and achieve reconciliation and a friendly relationship with each other and the rest of the Western bloc. Both countries joined the GSO, rearmed under its aegis, and eventually became an important part of the APTA. They cooperated with the USA, Australia, and New Zealand to contain Communism and help the RoC in its Herculean effort to stabilize mainland China.

Soon after the end of the war, India achieved independence. Wartime Japanese and Soviet invasion of northern India and the persistence of the Soviet threat looming from Iran and Afghanistan persuaded the Muslim Indian leaders to give up their calls for a separate homeland of their own and partition of British India. Instead they made themselves content with a special autonomy statute for the Muslim-majority lands that largely contained sectarian conflicts within acceptable limits. Nonetheless, the northwestern areas always remained one of the most instable and lawless areas of the Indian state. At independence, British India absorbed the princely states and Ceylon.

Independent India established a secular, socialist, federal republic with a multi-party democracy, strived to establish a mixed economy with an agrarian reform and rapid industrialization, and sought to abolish the caste system and increase the legal rights and social freedom of women. Its foreign policy pursued ‘non-alignment’ between the Western world and the Soviet bloc. The Indian leaders balanced a strong condemnation of Stalinist policies with a fierce criticism of Western colonialism and imperialism. After the Sino-Soviet conflict, however, India came to seriously fear it might be next on Stalin’s hit list and grew closer to the Western bloc, although it remained officially neutral.

Due to TTL Arab world being much less fragmented, but sharing many of the same structural flaws, a takeover of most of it by an ISIS equivalent is a distinct, if unwelcome, possibility if things go bad with Islamist revolutions and/or the collapse of Communism in the Near/Middle East and Central Asia. On the other hand, TTL united Europe is a superpower just as strong and hawkish as the USA, and TTL America is not going to be burned by any equivalent of the Vietnam War in the foreseeable future. So it is quite possible and even likely the Western world is going to react to an emergent ISIS equivalent in a much more decisive and heavy-handed way. On the other hand, more or less in the same period they shall have to deal with the consequences of the violent collapse of the Soviet bloc, so their attention and energies may get divided. On the gripping hand, even if the USA and the EU intervene quickly and decisively to stomp out the equivalents of Khomeini, Bin Laden, and Al-Baghdadi, they may easily find themselves in the same situation as OTL Afghanistan, only spread out across most of the Muslim world. As I see it, TTL America and Europe are going to get stronger, less divided, and luckier in many ways, but they are still going to have to deal with an instable and screwed-up Russia, China, and Muslim world, as the nasty legacy of Communism and their own mistakes.

 A major regional power certainly, because they have rather more territory and not much of a troublesome Arab minority in it thanks their successes in the Independence War and the Suez War. Moreover, they have a significantly bigger Jewish population, according to how I expect the average of the Nazi Holocaust of European Jews being stopped halfway by a successful Valkyrie coup and a longer-lived Stalin killing most Soviet Jews with his own Second Holocaust. Last but not least, TTL America and Europe are more or less going to have the same attitude towards Israel and the Arab world as OTL USA because of pro-Zionist sympathy created by the double Holocaust and the events of the Suez War. On the other hand, TTL Israel is going to face a substantially stronger Arab world, since the latter is going to be consolidated in a few large states. On the gripping hand, the United Arab Kingdom is going to have its attention and security concerns seriously divided because of Communist (and later, dangerously instable) Turkey and Iran (and ITTL Communism is seen by everyone as a more serious threat, with Stalin nuking and poisoning China into a new warlord era).

The KMT controls Taiwan, just like OTL. The main difference is ITTL they have Hainan, too. Because of their greater suspicion of Communism, ITTL the Americans acted a little more quickly and decisively at the end of the Chinese Civil War (although not enough to save the Chinese mainland, due to their post-Downfall sense of exhaustion), allowing Chiang to keep both big islands (much the same way and for the same reasons the Americans seized all of Korea at the end of WWII). The KMT uses them as a power base to fuel its slow and painful reconquest of the mainland after the Sino-Soviet War. The RoC is the best available candidate to reunify and rebuild China (the other options are a PRC crippled and tainted by Mao's blunders and Stalin's atrocities, and a Taoist Taiping equivalent). However the Soviet WMD attack screwed up China so much, the RoC resources are limited enough, and the West wary enough of the USSR that even if successful, the KMT comeback is likely going to take decades to be fulfilled, even with generous support from the Western powers.

Korea becomes a republic by default. After two generations, support for the Korean monarchy has dwindled to a fringe, neither the Americans nor Korean nationalists had much interest in a restoration, and the pre-colonial record of the Joseon dynasty was far from good if you ask my opinion. Theoretically speaking, I am a big fan of the benefits of a Japanese-Korean union, screw the Korean nationalists, so if there had been any politically feasible way to keep the pre-1931 Japanese Empire intact with this kind of PoD, I would have certainly preserved it. Nonetheless, ITTL the relationship between the Japanese, the Koreans, and the Southeast Asians is considerably less antagonistic and resentful than OTL (a crazier, genocidal Russia and its WMD devastation of China put the WWII misdeeds of Japan in a different perspective, apologies or no apologies), so it is entirely possible and even likely an East Asian equivalent of the federalist EU may arise by the end of the century with Japan, Korea, and the ASEAN countries (quite possibly ASEAN itself with a different name, and a closer, EU-like bond).

TTL vast, unqualified success of the EU project certainly increases global interest and support for other continental/regional federalist integration experiments considerably. Besides non-Chinese East Asia, other good candidates seem the Anglosphere and/or the Americas. The existence of another sister superpower across the Atlantic very likely spurs the Americans into having less nationalist exceptionalism (although for various reasons ITTL the West as a whole likely has a greater sense of its own exceptionalism and less postcolonial guilt). So the USA is quite likely to try and set up its own federalist EU equivalent with Britain, the Dominions, and at least choice bits of Latin America, some kind of (North) American-Pacific Union.

This kind of PoD is in all likelihood far too late to change the fate of the British Empire or the Commonwealth significantly. Post-WWII circumstances set up the USA and the EU as the main gravitational wells of the Western world, and any neo-British Imperial project simply does not have any remotely close to equivalent attractive force to compete for the Dominions' affections. Moreover, India blazes its own opportunist trail to potential-superpower status that is a balance act between trying to be the leader of the Third World/non-aligned bloc by playing the anti-imperialist card and being a trade and strategic partner of America and Europe for economic benefits and protection from crazy Russia and the Chinese disaster. Basically OTL role of China but being nicer and easier to deal with because of its democratic character.

Broadly speaking, by the 21st century Britain in all likelihood faces an unavoidable choice between being absorbed by the EU, the USA/NAPU, or less likely the NU. The alternative of England losing the United Kingdom and becoming one of most marginal, insignificant, and impoverished backwaters of the Western world is too stark for demagogues to obfuscate the issue and appeals to almost no one, xenophobia or not. The Nordic option would even exist only if we assume the NU wants the British and by the next millennium the Europeans and the Nordics still care to keep their 'separate but associated' special relationship and do not choose to end the charade with a full merger, since ITTL Euroskepticism is almost surely nutjob fringe stuff. There are certainly those within the European mainstream political spectrum that argue for a more decentralized system, but it is a political dynamic much similar to strong federalism vs. states' rights in post-ACW USA. ITTL the equivalent of the Brexit debate is likely an interesting hard choice with funny AH echoes: Do you prefer the "As if Rome/Charlemagne/Napoleon had been successful, but with liberal democracy" option or the "As if we had won or prevented the ARW, but the Empire became a Republic dominated by the American colonies" option ? Perhaps possibly the "As if Cnut the Great had won" third option, but maybe not. 

Given the greater strength of the Western world, and the weaker and more tained status of Communism, it is entirely possible decolonization gets to be somewhat slower and more ordered - although probably the PoD is far too late to change the outcome of sub-Saharan Africa substantially. OTOH, the time schedule of decolonization for Southeast Asia and the Arab world was not significantly different, although the borders it created were. Perhaps there are a few more regional unions (e.g. in East Africa) and less artificial states with screwed-up borders. Quite possibly political butterflies may let South Africa avoid Apartheid, keep its borders wide open to European immigration, absorb the rest of British Southern Africa, and evolve into a reasonably nice and stable regional power. In this context, Britain may or may not keep its extra little bit of colonial territory here and there, but it would basically be a few islands at most.

More or less everything between Egypt-Sudan, Greater Israel, Turkey, and Iran. I am uncertain if it is also going to include Yemen and Oman at its birth, but it is most likely going to absorb Southern Arabia too, sooner or later. It is the union of the Mashriq and Arabia with the Hashemites on the throne, minus Mandatory Palestine and the assorted post-1967 border territories that the Zionists conquer and absorb with the first two Arab-Israeli wars. Basically what the Entente promised to the Arabs during WWI, fulfilled at last - of course, the bargain does not include an authorization to threaten Western strategic and economic interests for the sake of nationalism, as Nasser and the Baathists discover to their ruin during the Suez War. ITTL circumstances (Axis/Soviet occupation of the Middle East during WWII, Communist control of Anatolia and Persia, Allied distrust of the Saudis due to their ambigously collaborationist behavior, France's postwar status as a defeated enemy power) persuade the Anglo-Americans to throw the Sykes-Picot Agreement, Saudi Arabia, and the various tinpot emirates to the rubbish and set up Greater Egypt and Greater Syria-Arabia as a way to try and stabilize the Middle East and set it up as an anti-Soviet bulwark. The Maghreb takes a different, more tortuous but ultimately not so different path, because of its closer bond with Europe.

The other big exception is Greater Israel, whose creation the Western powers sponsor because they decide the Jews deserve a sizable homeland of theirs after being screwed by two genocidal dictators and the two Arab kingdoms are so big and have so much free land (even if a lot of it is desert) that it is entirely petty and unreasonable for the Arabs to make so much of a fuss about Mandatory Palestine, if the Palestinian Arabs really don't like living in a Zionist state they can easily pack and go living into some corner of Egypt or the United Arab Kingdom. This pro-Zionist attitude of America and Europe only gets reinforced once Egypt and the UAK prove vulnerable to destabilization by pro-Soviet radical Arab nationalists and Israel helps the Western powers 'restore order' in the Middle East with the Suez War.   

Since you have so much heartwarming interest for the TL, I suppose I may immediately post the next update, precisely concerning postwar Middle East, and unlock the first map.

This map shows the political status of Europe during the first phase of the Cold War, from the end of WWII to Stalin's death (and its consequences). Germany actually owns the Sudetenland as well, and for this reason the 'federal' label of the Czech Republic is unnecessary and inaccurate, but it was different in the map I orginally used as base material and I'm not good enough of a mapmaker to redraw the post-Munich border accurately enough. Same reason why the Kalmar Union flag of the Nordic Union has an odd shape and orientation to fit available free space between the GSO, EU, and USSR flags.