Warplan is a World War 2 simulation engine. It is a balance of realism and playability incorporating the best from 50 years of World War 2 board wargaming.
So, Germany is at war with Yugoslavia, Italy is not, but... Italy has access to german conquered land.
It sounds like something to be addressed, isn't it?
You have to declare war with them if you are the axis. The next update the AI will automatically declare war with them once they are at 100%. I might also include a version of the 1939 scenario where Italy is already at 100% play by email