Mussolini was used to being on the winning side so wanted to enter with Germany to gain the most territorial gains. Mussolini wanted to expand and develop his colonial empire and he had ambitions in the Balkans, Africa and the Mediterranean. The scale of the German victories of the autumn of 1939 and the early summer of 1940 stimulated Mussolini’s greed. There was now the prospect of large rewards if Italy joined the war on Germany’s side. It appeared that the war would soon be won by Germany. It was, therefore, imperative to ‘assist’ Germany before the opportunity to gain booty was lost.
Mussolini was afraid of missing out on the spoils of victory and craved territorial gains. He feared being isolated in a German dominated Europe. He felt great rivalry with Hitler and resented his inferior standing. Italy had been steadily becoming an ‘economic colony’ of Germany’s; Italy was dependent on Germany for the purchase of many of its exports; Germany owed Italy $40 million – Italy wanted to secure the payment of this debt by keeping Germany ‘sweet’. Mussolini also feared Germany after breaking the Pact of Steel in 1939, and was afraid of the power of the German forces and was afraid that they would capture German speaking North Valleys. Mussolini was also annoyed at Britain’s naval blockades stopping German coal exports to Italy which Italy had become dependent on.
Mussolini was keen to present himself as a great military leader. Mussolini did not want to be regarded as of similar ‘metal’ as the neutral democrats of 1914.
By 1940 many leading Fascists had come around to the idea of war and saw the benefits of entering, like Grandi and Ciano.
Perhaps Mussolini thought that by entering the war he could distract the Italian people from the failures of his domestic policy.
For these reasons Mussolini decided to enter the war in June 1940. However it was a major error, as Italy was still economically and militarily unprepared and 'bled while' due to Abyssinia and Spain. There were limited resources and no war time economy. Therefore it led to the eventual fall of Mussolini and the collapse of his fascist regime.