Do you play it that Italy does nothing while neutral, i.e. Italy cannot buy new units or move what they already have? In my view this is essential for a workable neutral Italy; as far as the powers of the day were concerned mobilization was the equivalent of a declaration of war, so as soon as a power starts moving and building it should be considered at war for all purposes. Also, it’s rather unfair that Italy can build, yet Austria cannot attack it. Therefore, if Italy can build/move R1/2 then Austria has no reason not to attack Venice R1 to prevent an Italian buildup, which of course renders the rule obsolete. If you’re going to make Italy neutral for two turns, then Turkey should be neutral at least until the beginning of its first turn.