With respect and credit to Tom Colton; a map depicting the Free State of Alsace-Lorraine in his excellent TL
Weber's Germany: The Totalitarian Veterinarian, which I encourage you all to check out.
"This is no peace. All we have ensured to day is that the next war will begin in ten years' time."
"Ten years is all we need."
- German Foreign Minister Konstantin von Neurath to
Führer Friedrich Weber, after the signing of the Treaty of Gutenberg.
At the start of June 1940, Germany stood triumphant. Under the leadership of Friedrich Weber (and more importantly, the best generals of their generation) the
Wehrmacht had broken through at Sedan like the Prussians seventy year earlier and - unlike the Prussians or the Second Reich - making it to the sea and encircling the BEF at Dunkirk.
The British didn't roll over and play dead, of course; oh, Prime Minister Halifax was
tempted, certainly, but Britain could not be seen to be abandoning the French. He thus authorised a plan by his Minister of War Winston Churchill to evacuate all forces possible from Dunkirk with the Royal Navy and an armada of irregular "Little Boats."
It almost paid off. Almost.
The Germans turned north and shredded the lines around Dunkirk like crepe paper. Although the British evacuated 70,000 men from the area by the time Dunkirk fell on May 22nd, it still left 340,000 men trapped on the Continent, almost all of whom had by now fallen into German hands. Churchill took the fall for Dunkirk (though it wouldn't stop him becoming PM later on) and as Paris came under German fire the Allies were brought to the batgaining table (Liechtenstein has its uses after all).
On the first day of June, Germany and Italy presented their demands, which were designed by Weber to be negotiated down by Halifax and Pétain and thus more easily accepted. In the end the British and French acquiesced to: recognition of German occupation of Poland and Denmark, reduction of the French military to a quarter-million, Germany regaining Togoland and Kamerun, establishment of a Free City of Narvik as an autonomous German enclave, demilitarisation of the Low Countries and Malta, German and Italian naval vessels to be permitted use of Corsican ports, and - most relevant to this map - that a demilitarised Free State of Alsace-Lorraine was to be established and administered by a Franco-German commune to enforce its neutrality.
Alsace-Lorraine was, to be blunt, a buffer state; that it contained practically the entirety of the pre-war Maginot Line was not even close to a coincidence: with the Low Countries demilitarised the Germans could sweep into France again, and they knew it - the Free State existed to stop the French getting ideas while the Germans geared up for the Gread Crusade Against Bolshevism. Inside the Free State, German and French security forces rubbed shoulders uneasily as France and Germany competed for cultural dominance, to the detriment of the Alsatian population. The German
Stasi hunted down draft-dodgers and conscientious objectors who took their chances across the Rhine; the French
Deuxiéme Bureau, on the other hand, took its pick of Alsatian spies as it built a new line of defences within its truncated borders to counter the expansion of the Siegfried Line.
By 1941, then, Alsace-Lorraine was an immense No-Man's-Land in the Cold War between West and East which served only to demarcate German and Allied spheres of influence while both sides prepared for their inevitable return to arms.