Field Marshal Rommel watched his panzers streaming east across the Vistula river and thanked God again for the temporary bridges the engineers has been able to lay across the river. The Soviets had managed to blow all the bridges in this area in their hasty retreat, and having to maneuver to a standing bridge would have cost him a full day or more of time.

Rommel, who had been a Colonel when the war started and had advanced rapidly to Field Marshal on the harsh eastern front, looked over the map he'd posted on the wall of his field headquarters and nodded. His leading scouts were over 15km into Soviet lines and had yet to contact any significant resistance.

Apparently intelligence had gotten things right. The Soviets were fleeing eastwards in chaos. He intended to make them pay. Picking up the field phone on his desk, Rommel prepared to request more fuel for his forces. Fuel was all that could hold him back from taking Lublin within three days, of this he was certain. If the logistics people could just get him what he needed....

After a week of hasty preparations, the Axis Powers launch a broad offensive across the Eastern front. In Poland, where Warsaw remains under siege, German forces strike to the east towards Distyn and Lublin. To the south German, Hungarian, Romanian, and Bulgarian forces drive into the Ukraine, heading for Kiev and Odessa. Soviet forces, in a state of chaos, can offer little more than token resistance. In many places Red Army units simply lay down their arms and surrender, others join the Germans in attacking scattered communist-loyal units.

In five days Axis forces had gobbled up huge swaths of Soviet territory. To the north German forces have reached the Soviet-Polish border, to the south Odessa is under artillery bombardment and German armored spearheads are within 40km of Kiev. In areas still under Soviet control chaos continues to reign. Communist and rebel Ukrainian forces are fighting in the streets of Kiev and Kharkov. Soviet supply lines through the Ukraine are almost totally blocked by rebel forces, while in the Baltic states Riga and other cities are in complete anarchy, with anti-Communist elements exacting bloody revenge on their communist masters. Minsk is the only major city west of Moscow that is firmly in Soviet hands.

Odessa falls to advancing Romanian and Bulgarian forces. Kiev has been surrounded by German panzer forces and is suffering around the clock artillery and air bombardment. Rebel forces within the city continue to battle the loyal communist garrison.

German ships and transport aircraft begin delivering supplies to rebel forces in the Baltic states. Kiev falls to German forces. Rebel forces massacre thousands of communist officials and loyal soldiers before the Germans restore order to the occupied city.

The Italian fleet, with permission from Turkey, passes through the Bosporus into the Black Sea. In Riga German forces are welcomed as liberators when they reach the city late in the day. In the Ukraine the Axis advance has slowed as their supply lines are being stretched to their current limits. The Soviets have managed to establish strong defensive positions from Rostov to Kharkov, and from Pskov to Minsk. Hundreds of thousands of Soviet soldiers have been captured in the confusion of the Soviet withdrawals to the east.

Axis forces, exhausted from the month's rapid gains, are halted in the north around Lake Peipus and to the south at Kursk and Kharkov. The Axis have been forced to stop, consolidate gains, and move up their supply infrastructure.

In Sweden the Red Army halts offensive operations, instead fortifying along a line from Orebro to just north of Stockholm. The Soviets already control most of the mineral wealth of Sweden and are content, for the moment, to begin shifting forces to the shaky eastern front.

Italian naval air forces strike simultaneously at Sevastopol and Batumi, destroying much of what remained of the Soviet Black Sea fleet.

The Soviet garrison in Warsaw surrenders after the 40,000 surviving men are forced back into the city's center. With the fall of Warsaw, all of Poland is now in Germany's hands.

In Kiev a fascist Ukrainian puppet state is proclaimed and as its first act joins the Axis Powers and declares war on the Soviet Union. Many scattered communist forces around the Ukraine, who were left behind in the hasty withdrawal of the Red Army, remain active as partisan units and are harassing Axis supply lines and lines of communication.

Baltic states of Lithuania, Latvia, and Estonia proclaim independence, though like the Ukraine they are in truth German puppet states. All three join the Axis and declare war against the Soviet Union. In Riga and Kiev German and other Axis forces march through the streets in triumphant parades and are hailed as liberators. Public opinion in the west swings even more in favor of the Axis over the Soviets. The German propaganda machine is winning the public opinion war in the west. The atrocities begin committed by some SS units and the Gestapo in the newly "independent" Republics are kept well hidden.

In OTL the people of the Ukraine and the Baltic states did welcome the Germans as liberators, but Hitler felt he didn't need them so there was never any attempt to actually form pro-German states in the occupied territories. In this alternate timeline the situation is different. German and Axis forces have expended A LOT of their strength and the Soviets remain strong to the east in spite of the December meltdown. In spite of his feelings towards the Slavic "subhuman" I think Hitler was practical enough to see the need for getting the Ukrainians and Baltic people on his side. Remember, in OTL Hitler was fairly rational up until about 1942. I believe my scenario here is viable.

Italy embarks on naval buildup program with an emphasis towards submarines and naval air power. The buildup is targeted to be phased in over 3 years and should be complete by 1944.

High level meetings between German and Spanish official in Madrid result in a commitment by Spain to join at the Axis at some point in the future, no later than 1944. Franco agrees to this after being promised large amounts of military and economic assistance from Hitler and Mussolini.

Turkey signs sweeping economic and military pact with the Axis Powers. This agreement comes short of an actual Turkish entry into the Axis Powers, but it is a big step in that direction.

The Luftwaffe, along with the air forces or the minor axis powers, has gained almost total air superiority across the Eastern front. Many Soviet aircraft were captured or destroyed on the ground during the rapid Axis advance in December. The Red Air Force has been forced into a defensive posture while factories in the trans-Ural region go about the task of replenishing the Red Air Force with aircraft.

German engineers complete a prototype of Germany's next generation panzer design, the MkV.

Soviet forces have recovered to the extent that Stalin is beginning to consider a spring counter offensive retake Kiev and Riga. However, the German general staff and Hitler are making plans of their own as well. The spring and summer campaigns look to be very active on the east front in 1941.

The new 50 division army of the Ukraine is activated to ready status and begins taking up positions along the front west of Kursk and Kharkov. The new Ukrainian army is poorly trained and equipped but very well motivated. They know very well what will happen if Stalin defeats them. The Baltic states are also busy raising armies, though theirs will be much smaller. German forces in the Ukraine can now begin to consolidate back into full strength divisions and can be held as powerful mobile reserve and blitzkrieg forces or sent to other sectors of the east front.

In Japan, war minister Tojo and the inner circle of the Japanese military have decided to move against the Soviet far east. The Soviets appear to be rocked back on their heels and the western allies are slowly, but noticeably, building up their strength around the Pacific. Admiral Yamamoto wants a crushing strike against the Soviet pacific fleet and he is likely to get his way. Meanwhile, their war against China will proceed as planned. Once China and the Soviet far east are secured the Japanese feel they will be in a strong position from which to deal with the west via diplomacy or war. Also, the Japanese continue informal talks with Germany about joining the Axis Powers, but nothing has been agreed upon yet.

In the United States public opinion continues to favor the Axis Powers over the communist Soviet Union. Recently re-elected president Roosevelt secretly disagrees with these sentiments. He feels that a German victory over the Soviets would upset the balance of world power to a frightening degree. The Alliance for Democracy, Roosevelt feels, in this answer to this problem. Roosevelt wants U.S. entry into the Alliance for Democracy but he knows that the public will not be with him, and congress will never agree to it. Roosevelt has began to apply pressure, behind the scenes, for U.S. entry and wants to slow the flow of U.S. money and goods into the Axis Powers.

In Britain and France the political leadership is beginning to sense a danger in an Axis victory as well. Better to let the two totalitarian systems balance each other out. An outright Axis victory over the Soviet Union is becoming regarded as a very bad thing for the western powers of the world. Thus, it is decided, the flow of money, weapons, and supplies to the Axis Powers must be slowed down and eventually stopped altogether at some point.