1940-1944 - German Protectorate of Valiesk
The Third Reich invaded Valiesk on February 1940, taking the backward island nation by surprise with a naval invasion backed up with a massive paratrooper attack. President for Life Darilov was killed on the second day of the attack when a Luftwaffe bomb penetrated his bunker under the Presidental palace in Igorgrad, leaving the nation leaderless and critically damaging the Valieskan national morale, which was built up for two decades as a cult of personality of Darilov. Soon enough, after two weeks of fighting, Valkiesk surrendered to the invader.
The Whermacht set up a colonial administration in Valiesk called the German Protectorate of Valiesk, and proceeded to squeeze out every last bit of profit they could from the local industry and workforce, as well as from the coffers of the former Darilov administration. Most of Valiesk's Jewish population of 60,000 were murdered by Nazi firing squads, and many Valieskan workers were shipped to Germany as slave workers.
The Valieskan people resisted these atrocities, forming partisan groups in the mountains in central Valiesk and fighting a guerrilla war against the occupation. Later on, in 1943, they began receiving air-dropped supplies and weapons from the Soviet Union. While a thorn at the side of the Third Reich, the Valieskan partisans were unable to liberate their island from the Nazi occupation. But then the Red Naval Infantry came.
1944-1990 - the People's Republic of Valiesk
The Red Army attacked the German forces in Valiesk in mid-1944 using a massive Naval Infantry landing force, with powerful air and naval artillery support. After three months of intensive fighting and many casualties, the Red Naval Infantry liberated the entire island. Without much delay, they set up a provisional government under the leadership of Boris Nobrinsky, leader of the local partisans. In 1946, a year after the victory in the Great Patriotic War, this provisional government was transformed into a pro-soviet People's Republic of Valiesk, ruled by the United People Party of Valiesk.
Under communist rule, Valiesk was rapidly industrialized, its villages turned into mechanized cooperatives, its fishing boats motorized and the industry at Igorgrad and the other major cities vastly expanded; in 1976, a nuclear power plant was installed near Igorgrad. With the proximity of the pro-Western Scandinavian nations and Western Germany, of course, it was also heavily militarized, with several Red Banner Fleet submarine bases, Red Fleet naval bases, ICBM silos and a large, powerful army equipped with the latest Soviet arms.
Its proximity to the NATO states also made Valiesk a primary setting for cold-war maneuvering and espionage, with multiple listening posts and similar military intelligence targets based on the island. The local KGB branch was accordingly buffed out and heavily funded by both local resources and funds from the mainland.
Up until 1978, People's Valiesk's economy was constantly on the rise, owing to massive industrialization and to the establishment of many new coal and iron mines in its hills and mountains. However, during the late Brezhnev era, Valiesk's economy started to suffer from the same recession which engulfed the entire Warsaw pact in these years, and public unrest - almost unheard of until then - started to grow. Then, in 1990, the Soviet Union withdrew its forces from Valiesk, and the People's Republic disappeared almost overnight.