theredbaron,
I think this is a very interesting hypothesis and is beginning to sound much like the very realistic World War II computer game called “Hearts of Iron.” Since you have placed the year at 1942 and the Germans invaded Russia in 1941, I will assume that the Germans have already defeated the Russians. Furthermore, this seems to be a realistic assumption since in your hypothesis you have the Soviets already having relinquished part of the Ukraine to the German. I think Stalin would have only done that if Mother Russia were defeated. With that being said, the German army’s presence on the Soviet border, I think would certainly not call for substantial troops to protect their eastern borders. Also, let’s not forget the Russian need to continue to split their forces as the Japanese are still at their backdoor. In this situation, the Soviet Union would have been in no position to have any effective impact the German eastern front in case of an allied invasion from the west making such an invasion high unlikely or at least unsuccessful and at a tremendous cost. Although many people might disagree with my take on this fantasy, I predict that the major players might have looked like this in 1942:
GERMANY: Germany takes a break and focuses on the reorganization, recruitment, and redeployment of her massive armies as she continues to build her military machine. All production of the Panzerkampfwagen III is stopped and the factories are retooled for mass production of the Panzerkampfwagen VI better know as the Tiger I. This is done in creation of the new heavy armor divisions as was suggested by commander of 41st Panzer Corps, General Walther Model. Since the allies can no longer establish a second front, the African Campaign is the only hope of drawing German forces from Fortress Europe. Unfortunately, Germany now could allocate more resources to Italy while increasing troops strength in the North African Campaign at three times the rate capable of the allies. For the Axis, the rich oil fields of the Middle East seem to now be easily in reach with the North African victory that seems more likely than ever before and especially since Great Britain is downsizing in her forces there and the people in the United States are going weary of this war.
ITALY: Italy now more secure from an allied invasion turns it attention to Greece. Unlike the earlier Italian attempt to take Greece, this time Italy will be able to double her forces while counting on a great deal of German might being available.
FRANCE: The resistance is rapidly declining as Nazis forces can now be more effectively distributed and used to control the populace. The French quickly become pro-Nazis supporters of the German empire. In a matter of months, they are annexed as the largest State in the German Empire and they willingly become the newest and largest recruiting pool for the next generation German Army.
GREAT BRITAIN: Fearful of an invasion, England starts withdrawing her forces from the Pacific Theater as to increase her abilities to repel a major German invasion. Although she and the United States keep a significant force in North Africa, only skeletal forces remain in the Pacific to ensure continued protection for resources.
UNITED STATES: Although the Unites States is determined to defeat Japanese Imperialism, she can no longer depend on Great Britain in the Pacific. Nonetheless, she continues to have the support of South Africa, Australia, and New Zealand. She remains committed to protecting Great Britain at all cost, but with no staging area and limited opportunity to invade Germany, her words are little more than propaganda for the Nazis. However, her efforts and energies are turned to North Africa in a campaign that is quickly losing the support of the American people. In short, the great distance between Germany the United States becomes a comfortable reinforcement for the people in knowing that a German invasion is not logistically possible.
Now, I intentionally left some players out like Japan and purposely did not discuss many of the less significant players like Spain, Norway, etc., so that this discussion might continue with some other ideas or be open for a possible new turn. This is a very interesting hypothesis theredbaron. Thanks for making me think!