Interesting point about Portugal. I believe if she were under threat from Britain, Germany and Spain would rush in and take care of things. Besides, Spain is a lot like Italy...hell to attack.
I think the Germans would hand Spain older equipment (Pz 1, older Me 109's, etc.) and use them for garrisson duty so more soldiers would be free for other adventures. Also, the med would almost certainly go axis, meaning Britain and the United states might never invade Europe. Remember, Torch and Crusader gave the Americans much needed experience and helped wear down the Germans. I cant see an invasion of fortress Europe succeeding while the med is axis controlled.
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