Rumburg's future in the event of military defeat is quite uncertain. Which of these possibilities is more interresting for you ? How would the alliances made by sordlands, it's strategy during the war and the state of GRACE change the future ? Would a second war happen ? Feel free to describe your own headcannon in the comments.
Balkanisation:
A large scale civil war rips the country apart. As during the Russian civil war, dozens of factions emerge. Minorities try to gain independance, some noble families try to restore order, others try to usurp the throne. Meanwhile foreign powers support rebels of various ideologies. After several years, the front stabilise and several new countries emerges.
Division between East and West Rumburg :
The malenyevist ( heavely supported by valgsland ) manage to seize key industrial areas and proclaim a revolution. Whats left of the elites after sordish war crimes flees to the west of the contry. Grace members like Nahrburk and the principalities seek ATO's help to finance a conter-revolution. Even with direct military intervention they manage to secure only-half of the country. The frontlines freezes and Rumburg will remain divided for the foreseeable future.
- Stagnation:
Beatrice livingston manages to cling to power by suppressing in blood any dissent. To survive, the regime invest more and more money in the military and secret police while other public sectors lare neglected. Moreover internal sanctions complicate trade and standards of living does not keep up with the rest of Merkopa. The state survive for now but the systeme is slowly rotting like modern day Iran or Cuba.
- Structural reform:
Delegitimized, Beatrice loses power ( wheter by a military coup, abdication or assasination ). His succesor is competent and undertook major economic and political reform. The country democratise progressivly and diversify it's industry away from the military sector. Like Japan ans Germany, the losing side of a devastating war does more than rebuild itself. It Becomes one of the most stable and prosperous contries in the world.