I would think its good to give extra guys and ipc’s to Italy. You can add a couple Italian tanks to start driving into Russia (maybe to can opener). You could also get them into the African fight if you can keep the Italian navy a float.
I will say I like to take Yugo w/Germany for a possible IC build if it looks like the Italian navy is going under. A few German subs in the Med (with German air) could help axis turn things right. Plus both Italy and Germany can build in the same sz. I know Greece gives you this option too, but it can be invaded to easy from sz 99.