Berlusconi says that "the government of the time" felt it was the best thing to do to ally with Germany fearing her strength and the racial laws "were imposed on Italy" as part of the alliance. He knows perfectly well that this is not true because of his age and culture, but says it just to please his voters. The facts: Italy enforced the racial laws in 1938, one year before the beginning of the war, and Italy entered Italy entered the conflict only in June 1940, almost one year after it had started. The truth is that racial laws were totally consistent with the Fascist ideology Mussolini had created and already in the colonies since the beginning of the 1930s Italy was enforcing an apartheid regime. Also, it has to be pointed out that there were some allies of Nazist Germany that never enforced racial laws and Franco's Spain didn't even enter the war. Mussolini wanted to occupy the French colonies in Northern Africa and chose to enter the war in moment when Germany had already occupied most of Western Europe including France and looked likely to win the conflict. At that time the Soviet Union was still bound to Germany by a pact of non-aggression, so the war could not even be presented as "ideological". What a respectable and honest statesman should have said was something in this line: "the racial laws were the worst demonstration of an immoral ideology that was at the basis of the Fascist regime", and not "the worst mistake", or something catapulted from outside onto the Italians. Berlusconi, was was a child at the time, and three years ago declared to be an avid reader of Mussolini's diaries, preferred to eschew historical responsibility and present his forerunner as an enlightened statesman. Of course also the rest of the statement, "... a regime that did otherwise good things" can be analysed under the same lens, but it's less relevant to the present discussion. I am Italian and have no particular political bias.
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from the article: Berlusconi defends Mussolini for allying with Hitler