Nothing is required to suppress Italy; it starts with 10 income. You Taranto him and he loses all his mobility. If he scrambles and loses his air force as well, then he is all the more paralyzed.
With its navy, Italy can invade through Syria and look for Oil money, but if your navy is reduced to scraps, there is not much of a point in rebuilding it because its not going to be able to survive.
Unless your opponent has Italy take France, Italy’s job is to provide a few armored units to the Russian front so that you can Blitz/Break their lines at the critical moment and let a big stack of German mechs through the lines. Africa is pretty much a lost cause and my best opponent actually takes the pieces off Africa (the armor) because eventually the Americans will come and bust up your bonuses.
Even if Italy does get ahold of some real money, I’d use that money to build infantry and protect Rome and the Atlantic Wall so that Germany doesn’t have to do it.
Besides attacking Taranto, there really isn’t much you can do to stop the Italians UK1-UK5 besides mop up all their guys. Building an air base on malta or Gibraltar makes your Allied fleet stationed there pretty much impervious to any Italian counter…Don’t let Italy hold Gibraltar obviously…