Even the brilliant victory off Cape Matapan couldn’t salvage Great Britain’s foreign policy in Balkans, Mid East, and Eastern Mediterranean. The Greek government was in chaos after the unexpected death of Ioannis Metaxas. Prince Paul of Yugoslavia was the personal guest of Adolf Hitler at the Eagle’s Nest and signed Tripartite Pact. German troops were openly preparing for the Invasion of Greece, and Gen Archibald Wavell, the CinC MidEast was already making plans to evacuate the British expeditionary force there. And even worse, Turkey, watching the complete rout of O’Conner’s troops in Libya (O’Conner was captured by Rommel on 4 April) was leaning dangerously towards siding with Germany, as they had 25 years before. Turkey was no longer “The Sick Man of Europe” and its large and professional army would spell disaster for the British in the Middle East. And unlike the First World War, there would be no “Arab uprising” by new Lawrences of Arabia. As it was, the British could barely contain the pro German and pro Italian sympathies of many Arabs, particularly in Iraq.
In 1932, the Kingdom of Iraq was granted independence but as part of the treaty Britain retained some petroleum, passage, and basing rights. However as 80% of the British Empire’s oil came from Iraq, Persia (Iran), and Kuwait, British diplomats continued to meddle in Iraqi affairs. On 1 April 1941, Rashid Ali, a former pro German prime minister, led a coup with the four top Iraqi army and air force generals aka “The Golden Square”, against the pro-British monarchy. The Prince Regent fled to the RAF airbase at Habbaniyah, halfway between the towns of Ramadi and Fallujah. Over the next few days, Rashid Ali had all pro-British supporters arrested and formed the National Defense Government. Wavell could nothing to stop the coup: he had but a single battalion in Mandate Palestine, and a reinforced battalion defending RAF Habbaniyah. All four divisions of the Royal Iraqi Army sided with Rashid.
Turkey was now surrounded on all sides by pro German countries: National Defense Iraq, a nominally pro German but neutral Persia, the Soviet Union, Bulgaria, and Vichy French Syria. Only Greece and the small British expeditionary force there remained as a symbol of Allied power in the area.