I speak only for the Italian side of the discussion. As you can imagine, my point of view is critical towards the official canon
I really don't know why the writers decided to make Italy quit the NATO and declare war to other countries in a frenzy like that of Mussolini during World War 2. Since the end of that war, the country is really peaceful and USA-centric. Italy received lot of financial resources from North America so a change of flag, even in Twilight, is not plausible.
During the 70s there was lot of social instability because of terrorism (Brigate Rosse, dunno if you know what I mean) but with the fall of Berlin Wall on 1989 the Partito Comunista Italiano collapsed itself in several other small parties giving lot of space to the right parties and the Socialist Party. The latter is a good example: the leader, Bettino Craix (who was also prime minister) was very critical of communism and he even pushed is favour of US president Reagan's positioning of Pershing missiles in Italy. The presence of US troops here, like in many other european countries, was very strong. Democrats of left governed Italy from 1994 until 2001 with different political coalitions but the idea behind them was alway eurocentric.