I've held this back for a long time, but thus also thought about it for a long time:
Let's say a great power in NATO turns fascist. Should Germany leave NATO and rely on the EU as its defensive alliance?
There's little doubt in my opinion that a fully neutral Germany would break NATO's backbone in Europe. There would be no West-East land connection for NATO logistics in Central Europe without Germany. A neutral area would stretch from the Baltic Sea to the Western Alps. Northern Italian ports would become the primary ports for moving Western European and North American troops into NE Europe, such as a Baltic or Poland defence scenario. There would be a bottleneck south of Austria, too. Balkan ports such as Thessaloniki would be a fine choice for defence of Romania, but be terribly distant from NE Europe.
Thus German neutrality would make a huge impact due to geography in itself. A defence of NE European NATO would suddenly not hinge on quick reinforcement (as I wrote in many posts before), but on what's already in the region. Reinforcements would arrive very late (most of them about 2 weeks later that with status quo) save for weak air-lifted forces. The only effective alternative to prepositioned forces would be prepositioned equipment (POMCUS-style).
Germany would not become truly neutral if it left NATO, of course; it would still be a member of the EU and thus remain allied with the same countries in NE Europe.
Now let's look at the pro and contra, in a short form:
Pro leaving NATO in the event of a fascist great power in NATO:
This essentially boils down to (save for ethical reasons) what I wrote before;
You may get into trouble if you are and stay allied with an aggressive power. A fascist great power would likely fit this description (though Fascist Spain wasn't aggressive).
Another reason for leaving is actually a permanent one, true regardless of the allies; Germany needs no allies. It's surrounded by friends, and even Russia is in no way a realistic threat to a neutral Germany. In fact, a case can be made that being allied increases the risk of war and thus of suffering for Germans.
There's also the thing about the EU; whatever assistance Germans want to give to Eastern Europeans could be given through EU membership. NATO is kind of superfluous for deterrence and defence in Europe against Eastern European and Mediterranean neighbours, at least from a level-headed German perspective.
Contra leaving NATO in the event of a fascist great power in NATO:
The main argument was laid out here before
Without NATO a bond between Europeans and North Americans (particularly the U.S.) would be cut, but this bond may be the only thing (certainly it is the most influential thing) that keeps the two continents from developing rivalry and antagonistic behaviour. The U.S. spies on many of its European allies as if they were hostile powers even with this kind of alliance in effect. There sure are many issues that drive a wedge between Europe and North America, and it's the alliance that keeps the bloc together.
Right now below 2% GDP military spending is plenty for deterrence and defence of Europe even without American support, but we would need to go past 3% GDP if we were to orient our deterrence and defence AGAINST the U.S., probably more if we began to play great power games AGAINST the U.S. in Asia and North Africa.
Germany dropping out of NATO would not cut this bond, but fracture it. It would also fail Kant's categorical imperative test; it would be unethical to leave it up to the other Europeans to keep that antagonism-preventing bond intact.
- - - - -
The idea of leaving NATO is impractical politically, of course. The far left in Germany would love such a move, but even the greens would most likely betray their own rhetoric of three decades (again) if such a move was really up for a vote. Social Democrats wouldn't see any reason to leave and Christian Democrats would make a most determined stand; after all, NATO member ship and the whole integration with the West was their idea, their (and the FRG's) grand strategy for 60+ years.
Furthermore, there's a network of "transatlantic" journalists, news media editors and think tanks that are resolutely pro-NATO, even pro-U.S.. It's a well-organised lobby and it would produce a storm of outrage if any non-green, non-deep red top politician even only uttered the idea of leaving NATO. A fascist great power in NATO would NOT change this. They would no doubt promote sitting this out.
- - - - -
Well, what to do in such a hypothetical event?
I suppose we should draw the lesson from history for real (not only drawing lessons from 12 particular years) and take note that we sure need to do the opposite of what was done in 1914:
We should publicly declare that we do not support or condone aggressive behaviour.
No two-faced charade as in 2002/2003 when Chancellor Schröder weakly condemned the war of aggression against Iraq, but supported it indirectly.
Furthermore, we should call out all aggressive behaviour as a violation of North Atlantic Treaty obligations, publicly and strongly so. Everyone shall understand that the bad ally isn't the one who refuses to attack a sovereign country, but the one who does attack a sovereign country. The former is an obligation under the North Atlantic Treaty, the latter is a violation of the same.
In case that fascism settles and lasts for more than a few years in a NATO great power because democracy was defeated, we should cut our ties with it. This would even require leaving the EU if fascism takes hold in a European great power. We could invite all non-fascist EU members to a "EU 2.0" treaty afterwards.