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In reality (as opposed to the game), Italy was barely a major power but was still way ahead of any of its minor power competition. Their industry wasn't very good compared to many of their economically-comparable minor power competitors, but you'll notice that such minors as Czechoslovakia, Sweden, and the Netherlands lacked the population (or potential industry, given their size) to take proper advantage of their industry and tech capabilities. Italy's military also may not have seemed that impressive on land (still bigger than competitors like the peacetime Chinese, Poles, or Spain--other strong minor armies), but their navy was in a whole different ballpark than ANY other minor. In addition to maintaining a fleet competitive with the French (who had only been overtaken as third-strongest world navy in WWI), that fleet combined vastly-more substantial capital ships than could even be built by any of the minor power navies (the only minor power to produce its own dreadnoughts was Spain, which were the smallest dreadnoughts in the world). The navy represented both a huge cost for the Italian military, but also its most public representation (battleships were a far better representation of political power than better rifles or greater proportions of artillery, and Italy went for raw numbers in its ground forces).

Ultimately, it needs to be understood that, despite Italy's problems in producing a modern military, their competition in developing indigenous tank, warship, and aircraft designs was pretty limited outside of the other 6 major powers. The Czechs had good tanks but mediocre aircraft (and no coast), the Dutch had good smaller warships and aircraft but no tanks (and no indigenous capital ships), Sweden was balanced in all regards but lagged behind the majors and lacked capital ships (other than coastal defense ships), Spain and Poland were similarly mediocre but with even less overall technological development...etc. Even if Balkan and Swedish minor powers remained competitive with Italian tank designs, no minor power ever really could match the late-war aircraft production (even with German engine and gun licenses, the G.55 was basically an Italian product, and was considered one of the best aircraft of the entire war). Similarly, no minor power had the ability to even produce battleships on par with the Italian dreadnought refits like the Conte di Cavour, let alone their 40,000+ ton Littorio-class fast battleships.

Compared to the European majors like Britain, France, and Germany, Italy ends up looking pretty bad by comparison, and arguably the Japanese in a similar industrial position were able to capitalize on it and use their resources far more effectively (they had mostly the same sort of fundamental problems); Japan didn't just have a major navy, but the third largest in the world, without sacrificing capabilities for numbers. That said, its a bit of a different picture when you start comparing them to minor powers like Poland, Sweden, Spain, or China.
 
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I consider it one of the major powers, albeit the weakest (or one of the weakest) ones. It’s definitely stronger than some of the regional powers like Romania or Brazil. But it’s not one of the possible superpowers like the US, UK, France, USSR or Germany
 
Italy is a major power, but is the worst one of them all. Even France is better... marginally. And especially now so that they got a new tree. If Italy gets a reworked tree and one that doesn't actually weaken them more than they are now, then Italy cuold become better but they are the worst Major in the game right now with some Minors being superior.
 
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If italy and germany made historical, then you will know what is nerf. Italy will have 10% stability due to the royal court and formal fascists. Germany will have bureaucracy, civilian economy and military rivalry (worse than Japan)
 
Italy is a major, not a Major.
 
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I consider Italy to be a major Minor (or major Medium if you break it down that way), stronger than China (which I also consider a major Minor) but with less (peaceful) growth potential.
 
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I think one important thing for when they make the tree is to show that if Italy appears to be unified under a strong leadership (what fascism is supposed to be about), it is in reality on the surface, and if you try to reform the industry or the army etc... strong opposition should come in play from old corrupt corporations, the generals, the church, the King etc..
Sort of like the backlash Mexico gets, only worse?
 
Italy in the 30s was a technologically backward and industrially under-developed large nation with delusions of grandeur and dreams of the past. Think China without the manpower. A player can raise it up to close to France's power level in game, but it will never be able to compete with the big 5 powers. Due to it's pitiful focus tree Italy is basically handcuffed from the start.
 
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Italy is a major but a very weak one. It is bad at defending its own territory. It has more territory than it can defend. It is stupid for joining the German wars too early in game.

When I played the tutorial, I went ahead and lost a war to Yugoslavia as Italy.

I think Italy is a minor with a big navy and the ability to alliance with Germany. Which means Germany has to babysit them or else watch them lose ground.

I'm surprised there isn't an option to puppet them as Germany.
 
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Now, I did say Italy was weak... that being said. If you are good, and you know how to do it, Italy is by far a superpower in its own right.

Im not finished with the game as I still have the world to conquer, but it is January 4th 1940 and:

2020-09-17 (6).png


When I was capitulating france and UK, the last I looked I had only 200,000 manpower left available. I am now 2 million on extensive conscription. I am actually about to lower my conscription now to save manpower for when I form, Roman Empire. This is my current game.



2020-09-17 (7).png


In this game, I've managed to defeat the Allies all by my Italian Self. Germany has not gotten Austria nor Czech. I now have almost double their factories and I am not even close to being finished. germany will fall but first, the Soviet Union must go.
 
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Italy to me isn't a major, their goal in the game should be to become one, having to fight with bare bone resources, less population then their neighbours, except probably Switzerland, Austria and Yugoslavia, less industry, poor military equipment, poor commanders and more with that goal of creating a Mare Nostrum empire, Roman Empire for those really ambitious, I like to call Italy a minor major, though major minor could work, similar to Romania, Poland, Australia, Brazil, Turkey and others, where they aren't a minor who will get pushed over but 1v1 vs another major they should lose but they can crush other minors.
 
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I just wanted to add that for me now in hoi4 Italy is strong, it is a powerful country and a full major. I personally would like their change (new focus tree) to weaken them (compared to what is now) so that the player has to somehow deal with all the real problems of the country.

A bit like in the case of the France focus tree, where (regardless of the quality of the tree) the idea (I think) was to create a country with many problems (weaker in 1936 than before the transformation), which we can guide in one direction and solve some of the most for us pressing problems. The art of choosing a few of the many useful options is something I really like about focus trees.
 
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For me, Italy is like major minor country, but said that it's most likely my favourite country to play. You have limited resources, limited industry, you have to carefully manage your army and navy and you can do huge impact even in "historic" SP, simply by tying up UK in med, giving Germany AI easier time getting Norway.

I hope they don't make it weaker in future, not because of the challenge for players, but because gimped AI would make playing allies like UK even more dull if they have no serious opposition in med/africa. The thing that even after so many years the AI STILL REMOVES SHIPS from building queues is one of the greatest embarassement for Paradox. Italy AI just has 2 very old BBs, but it would have 6 otherwise if it didn't insta remove the ships from the queue and that would make the whole med navy part more interesting.
 
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I would like to put my 2 cents into this discussion...

Historically, I think that Italy should be considered as a major, maybe the last of the great powers, but definitely a major. To understand the italian context we should consider the following points:

- Italy won the WWI, but from economical point of view it looked like Italy lost the war: strikes, political instability and so on. The fear of the communism brought the king (and the capitalists) to choose Mussolini as 'savior of the fatherland' (or 'man of destiny'). PNF and Mussolini were supported by the bourgeoisie, capitalists, banks and industrial groups and many political and economical choices were 'forced' by these groups. (As an example: the war in Ethiopia was strongly desired by Agnelli (FIAT president), because of trucks production order; 'Quota 90' - so a 'Strong Lira' - was desired by the industrial groups (not FIAT that would like to have at most 110) to compress the wages and increase the profits, and so on). So, even if Italy was industrialized more than every other countries in the world (except for the big6: USA, URSS, Germany, UK, France and Japan. France was better than Italy mostly for the colonial empire - so resources that Italy hadn't got - while Japan could be compared to Italy from industrial power), the politics must 'satisfy' economic interests of the industrial groups. So many decisions were not so good for the country itself...

- Italy suffered a completely lack of resources: no oil (so no fuel), no coal (so no energy), no steel and so on. It was completely dependent from import of raw materials from abroad. This was one of the reasons why Italy decided to join the Entente in WW1 (other than the possibility to get irredent territories): the government knew the resources problem and joining the Entente Italy can continue to import raw materials from UK, while joining Central Empires Italy should try to get resources from Germany... but Germany hadn't so many materials to satisfy bot countries! This is exactly the problem Italy had during WW2;

- talking about italian army: they had very good soldiers (and Alpines were excellent), but bad generals (Messe and Amedeo Guillet were exceptions; also Bergonzoli was fine). Badoglio wasn't so bad (indeed he was quite good), but he was good thinking about WW1 warfare (so very old ideas)! One problem is the 'corruption' inside the army: 'friends' and 'friends of friends' (so friends of important fascist hierarchs and Mussolini) made a good career, the other ones... An other point: Mussolini was so narcissist that cannot accept that someone could be considered better than himself: this is why he tried to 'sabotage' some important hierarchs in different ways (like Grandi and Balbo) or generals: so paradoxically it was easier to make a career if you're a bad general (better if you're toady) than a good one (because you could obscure Mussolini's fame). An other problem is the backwardness of warfare ideas (this is a common problem on other countries) and the lack of equipments. About this last point you have to consider that Italy made 2 wars between 1935 and 1939 (Ethiopia + Spain) and especially the second one was really a black hole of money and military equipments. After the end of the Spanish Civil War, in order to be ready for an other continental war, Italy would need at least 3 years to renew and refill the army (+ airforce). Consider also that Italy joined the Spanish Civil war for 2 reasons: not have a strong socialist alliance in the west (France+Spain) and as a propaganda army (as everything in Italy during the fascist years). So no economic return from the victory of Franco, but many loans (of money and equipments) that Spain never gave back; Germany - on the contrary - got lots of economic contracts (for resources exploiting) in exchange of the support during the war.

- talking about the italian airforce: it's complicated. Until Italy decided to put money and investments into air research, Italy produced state-of-art aircrafts (especially bombers and fighters), but... Italo Balbo (secretary of state for aviation in 1926-1929 and then chief of airforce 1929-1933) was focused on propagandize Italy (and itself) all over the world with feats of aviator and Mussolini cannot accept it (he removed Balbo and take the control of the aviation in 1933...). So, in order to sabotage Balbo, and also because of the expenses of the 2 wars Italy made, the research and the investments in the airforce collapsed in the middle of 30's. Consider that: CR32 (produced from 1932-1933) was really a good biplane-fighter, but in 1938 (so 6 years after) Italy continued producing the CR 42 (an evolution of the CR 32) that was probably the most powerful biplane in the history... but was still a biplane!!! Italy tried to fill the gap in the late of 30's (Fiat G.50, Macchi MC. 200, Reggiane Re. 2000 in 1938; MC.202 and Re.2002 in 1940; G.55, MC.205 and Re.2005 in 1942) developing really good aircraft from aerodynamic point of view, but it was too late (in fact during the battle of England many fighters were still CR 42...). From developing point of view we have to consider these other 2 points: even if the project of the aircrafts were really, really good (Macchi MC. 202 were one of the best fighters in 1940 and the 'Serie 5', so the Fiat G.55 and the Macchi MC.205, were considered one of the most powerful axis fighters), Italy suffered lack of good engines: so they have to wait for the German license of good engines; second point is the production point: while Germany decided for 1 kind of aircraft (the Bf 109 and the the FW 190 and all factories produced this kind of aircrafts), Italy - because of the first point I wrote: satisfying each industrial groups - decided to split productions: so some Macchi, some Reggiane, some Fiat. This caused a slowness in the production and also a problem of recovery of spare parts. Moreover the Macchi created aircrafts they were really good, but they looked like handcrafted: consider that a Fiat G.55 (or G.56) can be produced 7 times faster than a Macchi MC.205 (or MC. 206). This is why Germany decided to produced for itself the G.55 instead of the Macchi!
Just to finish the airforce chapter: Italy produced really good medium bombers (Savoia-Marchetti SM. 79 used both as tactical and naval bombers) and heavy bombers (Piaggio P.50 and P.108), but heavy fighters and CAS were a mess!

- talking about the navy: Regia Marina was quite strong (it cannot be compared to USA, Japan or UK, but it can be compared to the France). They have lots of submarines (really good quality), many destroyers (also in this case good quality), really good LC (Montecuccoli, Duca d'Aosta and especially Duca degli Abruzzi were really good LC classes), old fashioned HC (but Zara class was really a good HC if you think that was developed in 1929!) and modern battleships: Conte di Cavour class was modernized during 1933-37 and was quite good BB, and the Littorio class was really an excellent BB: it was faster than all other BB of the same ages, but with the same armor and guns. The defect was the range that was really small, since this class was thought for Mediterranean sea (so it cannot be used in Atlantic. This is the reason why, even if it has the same armor and main guns, it was faster than other BBs). The main problems were: the total abscence of any carrier (Romeo Bernotti tried to warns about this stuff, but Mussolini preferred to follow Cavagnari and his BBs approach) and the old approach of his chief of navy (Cavagnari) that forbid the use of radar and sonar on the ships for many years (so, for example, destroyers were very modern thinking on speed, armor, AA and torpedos, but not so modern on submarine warfare!). And it's true that after the night of Taranto, the admirals were scared about the UK navy power, so the approach was very defensive.

- talking about politics: noone wanted the war in Italy. neither the king, neither the population, neither the most important fascist hierarchs. And almost everyone despised germans and Hitler. Maybe Ubaldo Soddu was the only german fan. Also in the 1935 Mussolini tried to make an other Stresa front with UK and France against Hitler (trying to defend Austria), then something changed. After economic sanctions (due to Ethipian war) and moreover the civil war in Spain, Mussolini and Hitler got closer (Mussolini, not other fascists like Grandi - that was a UK 'fan' - Balbo or Ciano and the king). This nearness wasn't appreciated because they were worried that Hitler would take Italy into a war and during 1938 a coup was thought by the prince (Umberto II, with the support of the Army (Graziani and Badoglio)) to remove Mussolini. Munich agreement stops everything, because it seemed that Mussolini was able to 'bring peace in our time' too.
Anyway in 1939 everyone was conscious about the problem of the italian army/airforce and about the resource lack (Mussolini too), so they decided to not enter in the war (they said they'll be ready in 1942... about the resources Italy needed there is the famous 'Molibdeno list'...) and even in 1940 everyone tried to advice Mussolini against entering the war, but probably he thought that the war will be very close to the end...
 
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Good analysis from this post of Dayyālu at the forum rpgcodex :

So, the age-old question of why Italy sucked in WW2. The question must be approched properly, because the reasons where many and interlocked.

First of all, there is a huge tradition of mostly anglo-saxon propaganda that has to be reconsidered: the Italian fighting man was on the level of most soldiers in the conflict, and when in a proper situation with proper support managed to push his weight. Italians weren't worse at war than the Rumenians, the Greeks or even the British (early war), if we consider the individual soldiers. It's simply that the single soldier was put into the shittiest situation.

Let's start with the basics: Italy was a poor country, only barely industrialized. Even Germany wasn't well-industrialized compared to the US or even the Union: Italy was an agricultural country with no natural resources , ferociously dependant on foreign import for most of the needs of modern industrialization and with a population that was mostly illiterate. Recruits with technical aptitude were rare. This means that Italian weaponry was more expensive, slower to produce and often of inferior quality if compared to others. But we'll discuss the equipment later.

One thing that the backwardness of Italian society worsened was a clear social divide between the ranks. Italy has never been good in being "unified", and it has been even worse at being a coherent Nation State. There was, and there still is, a ferocious sense of local belonging amongst most Italians: and the Italian officers had in most cases nothing but contempt for the "country bumpkins" that were in the ranks. Italian officers developed into a system that richly rewarded "office warriors", meaning Italy had a shitton of administrative officers and lacked trained field officers and NCOs, and the reserve dumped people unfit for service. This meant that for the field officers you had people that lacked training, grit and sense of responsability: and the higher ranks were mostly promoted out of family connections or political support. Furthermore, they were a different social class: Italian officers enjoyed the perks of their rank, had different food and lodgings, and that caused negative morale consequences for the rank-and-file. R&R instead for the common ranks was atrocious (some men in North Africa or in the Balkans fought for three years straight with no relief or pauses). In short, Italian officers were badly trained bourgeoisie that often lacked the loyalty of their own men if not for military discipline, a thing harshly enforced. Furthermore, Italian society, despite twenty years of Fascism, utterly lacked the motivation for "total war" and openly despised the Germans: OVRA reports are an amusing read as the common view of the German Ally was terrible. Admired for their technical prowess, considered brutal barbarians in all other regards. With such allies...

Wait, you can ask, how the heck Mussolini in TWENTY YEARS failed to build enough support for a good war and for his regime? The thing is two-fold: first, the Fascist Regime had the support of the population in a very.... Italian way, so as long as the population got enough gibsmedat everything was good. When that failed to keep up only the True Believers stuck with the Duce, a stunning minority. Second, the Fascist Regime was outwardly powerful: in reality, Mussolini had a stunning amount of problems caused by opposing powers inside Italy: the King himself, the Church, the industrial powers, his own party organization.... the propaganda painted the Duce as an all-powerful figure, but in reality you had this schizophrenic situation where everyone technically followed Mussolini but at the same time the real power of the Fascist State was limited. Lemme explain with an example: tank production. Italian tanks were shit. FIAT-ANSALDO , the main industrial conglomerate that built Italian tanks, managed for more than 15 years to keep an iron grip on Italian tank production sinking all opposition, be it Czechs, other italian designers or even German models: the Italian leadership knew that the product was shit, but "nothing could be done" as you could not directly oppose FIAT-ANSALDO because if you bought other tanks then FIAT would have closed their factories and you would have gotten strikes and a loss of popularity that Mussolini could ill-afford. Yes, i'm literally telling you that the fascist State bought shitty weapons because it was hostage of corporate interests. Same applies with the Navy and the Air Force, with a bunch of hilarious examples of subpar prototypes or corruption scandals.

It's weird, but ... Mussolini was the main power everyone referred to (the biggest strategical mistakes he did single-handedly) but at the same time his power to really influence the Italian society was incredibly limited, propaganda boasts aside. Furthermore, the fascist party had never managed to do a proper "revolution" despite claims: until 1943 and the RSI, Fascism pretty much protected the old elites, worsening the traditional italian problems of backwardness, corruption and nepotism. Scientific research and weapon development were secondary to political and family considerations: for example, Italy threw out a shitton of bomber prototypes, most of them clearly unviable, just to give chances for embezzlement. You can say that all countries had such things (the "feudal" industrial system of Nazi Germany or even the initial crony corruption inside the SU) but the problem in Italy was so common that it actively fucked up weapon design and production.

Furthermore, Italy lacked resources or stockpiles for a modern war. Italy in 1940 had already burned considerable resources into colonial expeditions (Ethiopia) or in the Spanish Civil War, with thousands of trucks and hundreds of artillery pieces sent to fight campaigns that had little impact for Italy itself. The commercial blockade that the Allied powers forced on Italy started strangling the war economy almost immediately, and the Fascist State was ill-organized: they failed to plan for such a blockade, and if someone planned he wasn't heard because no one wanted to tell Mussolini the bad news. This takes us to another peculiar thing: Mussolini had a lot of limits, but in the end everyone deferred to him for the ultimate decisions, and Mussolini utterly lacked a trained cabinet, being surrounded by self-serving sycophants that inevitably failed to tell him the truth of the situation.

So, for the basics, you had a poor country with no resources , shitty allies, and a schizophrenic political system. That can't go wrong, no?

If we want to 'sperg on equipment, the Italian Army had hilarious problems with their equipment. Their logistics were a mess, meaning the troops were often underfed, under-equipped and under-supplied: not particularly their fault though, as the ammunition needs of italian weapons were a mess, with five to nine different calibers employed by a stunning array of borderline-functional weapons (the infamous Breda 30 LMG or the Brixia mortars). Grain loads for the guns could not be trusted (as the ammo factories had shitty checks), meaning that the already underpowered Carcano rifles had unrealiable performance. Sure, Italy had some great guns, like the MAB SMG, but this takes us to another of the basic problems of the Italian industry: it was underdeveloped. Let's take the MAB. It's a great SMG, sure, if we compare it to a PPs-43 or something. I am going from memory here, so the true data is probably different: a single MAB required more than forty hours of work done by a skilled artisan, while you could equip a squad with the same man-hours for PPs SMGs: Italian production was badly organized and tragically slow, meaning that even good designs could not be produced in numbers or replaced fast enough (case in point, the Royal Air Force). And often you had shitty designs that were kept into production for political or "Whatever we don't have anything else" reasons.

Tanks were developed by a single guy. I am not joking. All the Italian tanks were developed by a single man in a single office at the FIAT-ANSALDO, and whatever he made got okayed because reasons, fuck performance. Sum that with subpar tech and you had those beautiful riveted tankettes with the worst engines you can think of. Sure, Italian doctrine didn't focus on tanks much (it was commonly believed that the war would have been fought like in WW1, mountain front) but they were still crap.

Navy was borderline adequate (good training, some good units) but the command (SUPERMARINA) was scared of everything and lived under a costant psychological inferiority against the British. Think of..... I dunnow, Navy depression: "We can't win we can't even try if we try we're gonna lose" and thus they lost or did atrocious mistakes or suffered hilarious reversals like Taranto. The only bright spot for the Italian Navy were the frogmen, but that's a desperation weapon.

The Air force would require several paragraphs, so whatever. Let us say that it wasn't terrible, but it lacked staying power, Italian training wasn't adequate, and the Italian machines were often horribly under-armed. Go play War Thunder or something, and check how many machineguns the Italians get. Two at best, and with shitty fire rates and ammo loads. And the Italian air industry could not replace combat losses.

Do you know that Italy had an equivalent of the SS? The MVSN "Milizie Volontarie per la Sicurezza Nazionale", or commonly known as the "Camice Nere". Most of them had horrible equipment, terrible logistics, and were composed of old men that performed horribly under fire. There was a reason Hitler purged the SA as "unreliable", but Mussolini could not afford such things, so he got the shit-tier of political military units. Some of 'em weren't bad (youth units in particular) but pearls before swine.

And at last, the strategical problems. See, now we have a poor country with bad industry. What we are going to do, focus on a few theatres were we can leverage our limited strength?

No, we're Fascist Italy, we're going to send troops randomly around in Africa, in the Balkans and in Russia in a desperate attempt to ape the Germans to mantain internal support and international legitimacy. And thus you get from waging a parallel war (Greece and Africa) to be a subordinate of the Germans (Africa and the Balkans) to be a slave of the Germans (Russia, Italy, RSI). Because you sent your troops into situations they could only lose, and thus you start a negative spiral of self-crippling choices and political disasters. Italy in WW2 is the direct opposite of the concept of "concentration of forces": it was literally "dispersion of forces" at its best.

Now I'm fucking tired and I've sperged enough on the subject. If you have specific questions, go wild, if I can I'll reply. All typos and mistakes are mine.


This is a great post, I would also point out that the failed invasion of Greece was not planned. Literally. Mussolini essentially said that some of the spectacular early-war successes of the Third Reich should be replicated, and the offensive was started literally out of the blue with even a third less of the forces that were estimated to be needed for a successful invasion.
And also Mussolini managed to send around half million of soldiers in Russia "in the hope that sharing-type Adolf" (I'm sarcastic here) would actually divide some spoils after the victory. That's pretty much how we managed to lose the war.
 
I would like to put my 2 cents into this discussion...

Historically, I think that Italy should be considered as a major, maybe the last of the great powers, but definitely a major. To understand the italian context we should consider the following points:

- Italy won the WWI, but from economical point of view it looked like Italy lost the war: strikes, political instability and so on. The fear of the communism brought the king (and the capitalists) to choose Mussolini as 'savior of the fatherland' (or 'man of destiny'). PNF and Mussolini were supported by the bourgeoisie, capitalists, banks and industrial groups and many political and economical choices were 'forced' by these groups. (As an example: the war in Ethiopia was strongly desired by Agnelli (FIAT president), because of trucks production order; 'Quota 90' - so a 'Strong Lira' - was desired by the industrial groups (not FIAT that would like to have at most 110) to compress the wages and increase the profits, and so on). So, even if Italy was industrialized more than every other countries in the world (except for the big6: USA, URSS, Germany, UK, France and Japan. France was better than Italy mostly for the colonial empire - so resources that Italy hadn't got - while Japan could be compared to Italy from industrial power), the politics must 'satisfy' economic interests of the industrial groups. So many decisions were not so good for the country itself...

- Italy suffered a completely lack of resources: no oil (so no fuel), no coal (so no energy), no steel and so on. It was completely dependent from import of raw materials from abroad. This was one of the reasons why Italy decided to join the Entente in WW1 (other than the possibility to get irredent territories): the government knew the resources problem and joining the Entente Italy can continue to import raw materials from UK, while joining Central Empires Italy should try to get resources from Germany... but Germany hadn't so many materials to satisfy bot countries! This is exactly the problem Italy had during WW2;

- talking about italian army: they had very good soldiers (and Alpines were excellent), but bad generals (Messe and Amedeo Guillet were exceptions; also Bergonzoli was fine). Badoglio wasn't so bad (indeed he was quite good), but he was good thinking about WW1 warfare (so very old ideas)! One problem is the 'corruption' inside the army: 'friends' and 'friends of friends' (so friends of important fascist hierarchs and Mussolini) made a good career, the other ones... An other point: Mussolini was so narcissist that cannot accept that someone could be considered better than himself: this is why he tried to 'sabotage' some important hierarchs in different ways (like Grandi and Balbo) or generals: so paradoxically it was easier to make a career if you're a bad general (better if you're toady) than a good one (because you could obscure Mussolini's fame). An other problem is the backwardness of warfare ideas (this is a common problem on other countries) and the lack of equipments. About this last point you have to consider that Italy made 2 wars between 1935 and 1939 (Ethiopia + Spain) and especially the second one was really a black hole of money and military equipments. After the end of the Spanish Civil War, in order to be ready for an other continental war, Italy would need at least 3 years to renew and refill the army (+ airforce). Consider also that Italy joined the Spanish Civil war for 2 reasons: not have a strong socialist alliance in the west (France+Spain) and as a propaganda army (as everything in Italy during the fascist years). So no economic return from the victory of Franco, but many loans (of money and equipments) that Spain never gave back; Germany - on the contrary - got lots of economic contracts (for resources exploiting) in exchange of the support during the war.

- talking about the italian airforce: it's complicated. Until Italy decided to put money and investments into air research, Italy produced state-of-art aircrafts (especially bombers and fighters), but... Italo Balbo (secretary of state for aviation in 1926-1929 and then chief of airforce 1929-1933) was focused on propagandize Italy (and itself) all over the world with feats of aviator and Mussolini cannot accept it (he removed Balbo and take the control of the aviation in 1933...). So, in order to sabotage Balbo, and also because of the expenses of the 2 wars Italy made, the research and the investments in the airforce collapsed in the middle of 30's. Consider that: CR32 (produced from 1932-1933) was really a good biplane-fighter, but in 1938 (so 6 years after) Italy continued producing the CR 42 (an evolution of the CR 32) that was probably the most powerful biplane in the history... but was still a biplane!!! Italy tried to fill the gap in the late of 30's (Fiat G.50, Macchi MC. 200, Reggiane Re. 2000 in 1938; MC.202 and Re.2002 in 1940; G.55, MC.205 and Re.2005 in 1942) developing really good aircraft from aerodynamic point of view, but it was too late (in fact during the battle of England many fighters were still CR 42...). From developing point of view we have to consider these other 2 points: even if the project of the aircrafts were really, really good (Macchi MC. 202 were one of the best fighters in 1940 and the 'Serie 5', so the Fiat G.55 and the Macchi MC.205, were considered one of the most powerful axis fighters), Italy suffered lack of good engines: so they have to wait for the German license of good engines; second point is the production point: while Germany decided for 1 kind of aircraft (the Bf 109 and the the FW 190 and all factories produced this kind of aircrafts), Italy - because of the first point I wrote: satisfying each industrial groups - decided to split productions: so some Macchi, some Reggiane, some Fiat. This caused a slowness in the production and also a problem of recovery of spare parts. Moreover the Macchi created aircrafts they were really good, but they looked like handcrafted: consider that a Fiat G.55 (or G.56) can be produced 7 times faster than a Macchi MC.205 (or MC. 206). This is why Germany decided to produced for itself the G.55 instead of the Macchi!
Just to finish the airforce chapter: Italy produced really good medium bombers (Savoia-Marchetti SM. 79 used both as tactical and naval bombers) and heavy bombers (Piaggio P.50 and P.108), but heavy fighters and CAS were a mess!

- talking about the navy: Regia Marina was quite strong (it cannot be compared to USA, Japan or UK, but it can be compared to the France). They have lots of submarines (really good quality), many destroyers (also in this case good quality), really good LC (Montecuccoli, Duca d'Aosta and especially Duca degli Abruzzi were really good LC classes), old fashioned HC (but Zara class was really a good HC if you think that was developed in 1929!) and modern battleships: Conte di Cavour class was modernized during 1933-37 and was quite good BB, and the Littorio class was really an excellent BB: it was faster than all other BB of the same ages, but with the same armor and guns. The defect was the range that was really small, since this class was thought for Mediterranean sea (so it cannot be used in Atlantic. This is the reason why, even if it has the same armor and main guns, it was faster than other BBs). The main problems were: the total abscence of any carrier (Romeo Bernotti tried to warns about this stuff, but Mussolini preferred to follow Cavagnari and his BBs approach) and the old approach of his chief of navy (Cavagnari) that forbid the use of radar and sonar on the ships for many years (so, for example, destroyers were very modern thinking on speed, armor, AA and torpedos, but not so modern on submarine warfare!). And it's true that after the night of Taranto, the admirals were scared about the UK navy power, so the approach was very defensive.

- talking about politics: noone wanted the war in Italy. neither the king, neither the population, neither the most important fascist hierarchs. And almost everyone despised germans and Hitler. Maybe Ubaldo Soddu was the only german fan. Also in the 1935 Mussolini tried to make an other Stresa front with UK and France against Hitler (trying to defend Austria), then something changed. After economic sanctions (due to Ethipian war) and moreover the civil war in Spain, Mussolini and Hitler got closer (Mussolini, not other fascists like Grandi - that was a UK 'fan' - Balbo or Ciano and the king). This nearness wasn't appreciated because they were worried that Hitler would take Italy into a war and during 1938 a coup was thought by the prince (Umberto II, with the support of the Army (Graziani and Badoglio)) to remove Mussolini. Munich agreement stops everything, because it seemed that Mussolini was able to 'bring peace in our time' too.
Anyway in 1939 everyone was conscious about the problem of the italian army/airforce and about the resource lack (Mussolini too), so they decided to not enter in the war (they said they'll be ready in 1942... about the resources Italy needed there is the famous 'Molibdeno list'...) and even in 1940 everyone tried to advice Mussolini against entering the war, but probably he thought that the war will be very close to the end...
the problem of the "Reggio" planes (RE and Numero) were excellent but ... too little products! Like the famous Jet that I placed the link, it remained a prototype, perhaps with a "Czech alley" jet system without further development, but it was still a jet! And realistically (don't watch the game) a jet shoots you down 10 normal planes and it doesn't get shot down! Balbo was also a good general (he wanted to wage blitzkrieg in Africa). Unfortunately he died. He was the only Italian general to receive from the English a crown of flowers (thrown from a plane) with a message that was more or less this "Honor to a great general, which fate has unfortunately put on the opposite side". If you read "between the lines" you can see that only a general you fear, send these condolences. The British with Balbo were ready to pack their bags!
 
The game UI considers it one, and some players call it a major power, but is it really? Italy is not fully industrialized during the games time period (and didn't fully industrialize historically until the 1950s.) Italy starts in 1936 with 20 civilian factories, which is barely more than what Poland has at 17, and is less than what Japan has, they have 25. The Italian navy is OK, but its smaller and less advanced than the French fleet, so Italy's navy cannot guaranty control over the waters directly around the Italian peninsula. Finally, the Italian air force starts with less fighters than France, but more bombers.

This combined with the historical fact that Italy had significant difficulty beating Ethiopia, and was outright defeated by Greece, a minor country, needing Germany to intervene to save them, leads me to believe that Italy is not a major world power, but a minor regional power.
No.