When compared to other European nations the Italian Army seems to be one of the worst performing armies, is this down to propaganda or was the army just the worst managed of all the nations?
i think it breaks down into two major speheres, equipment and morale and leadership.
For equipment, Italian arms and armor were (generally) either poor in performance, or insufficient in supply:
Infantry RIfle
the Carcano "series" of rifles dated from 1895 (not unusual for bolt action rifles, and not an issue in and of itself). it was a serviceable rifle, but fired a relatively weak 6.5x52mm cartridge, and it had a rather tortured upgrade history, with numerous improved models being made, but never in sufficient quantities, or when ammunition changed to 7.35x51mm, enough ammo made for it (sometime in late 41-early 42 units equipped with the new rifles bored for 7.35 were reissued 6.5 rifles due to lack of 7.35 production).
MG:
the primary squad MG, the Breda 30 had some major issues, it was a closed bolt, non-blowback magazine fed MG, could not be belt fed, had major overheating issues, fired the weak 6.5 cartridge, and had a tiny little issue with the closed bolt system allowing a stuck round to cook off destroying the gun..
Tanks:
There were about a dozen or so Italian tanks in service throughout the war, a standard mix of light, medium, and eventually a single "heavy" tank type:
Light only real one worth mentioning was the L6/40, which was a decent little light tank for when it was originally conceived, it was small, light, and relatively reliable, it packed a 20mm main gun and an MG. Unfortunately, it became rapidly obsolete after its 1940 debut, lacking the speed, armor, or armament required for a light tank to survive, even in a reconnaissance role, which it was rarely allowed to do, since italian medium tanks were... lacking
medium the main medium battle tanks for Italy were all fiat produced, and ranged from the m11/39 to the m15/42 (italian naming conventions are class, so m for medium, weight and then year adopted, so the main tank used, the m13/40 was a medium, 13 ton tank, adopted in 1940). starting off the war, Italian tanks were decently well gunned with a 47mm main gun on the m13/40 (this was better than almost all its contemporaries), and had barely sufficient armor for the period, but were notoriously unreliable, and as a rule, had some rather poor internal utility, with either cramped or poorly designed fighting compartments for their crews. as with the light tanks, all Italian medium tanks were quickly superseded by the opposition, and with the exception of about 1800-2000 m15/42s, were produced in insufficient numbers. Another major problem with the entire series was that realistically, they were all significantly under-weight for their class, and were rapidly superseded by much heavier opposing medium tanks, carrying better engines, armor, and weapons.
heavy only one heavy tank in the Italian nomenclature made it to production, the p26/40. note the same nomenclature system is used here, so this was a 26 ton tank, which really was not at all a heavy tank, this was much closer to what became the normal medium tank weight for the period, the Panzer III was around 23 tons, the Lee/Grant were 27 tons, the T34 also around 27 tons, etc. It was armed and armored as a medium tank, and was only built in very small numbers, only a handful were ever combat capable, and there were almost 100 made overall, but most lacked parts and engines.
Self Propelled Guns Actually pretty damned good, probably the best equipment the Italian army had during the war, the series was the Semoventes, there were numerous different versions, but all were built on medium tank chassis, but were more reliable, and had some very good guns on them. Originally designed to be solely SPGs, they were, in the field, pressed into service as assault guns like the german StuGs, and performed well in that role, the most notable from the series was the 75/18.
Artillery The Italians had some good pieces, and got some good artillery from Germany as well, especially the ones mounted on the Semoventes, BUT, most of the decent towed pieces were (were developing a trend here right?) produced in relatively small numbers, what was around in large numbers were large amounts of ww1 era weapons, including captured Austro-Hungarian pieces, the vast majority of which were obsolete by 1940. Ammunition supply was also a problem due to the caliber mixes, and lack of production.
I think that covers most of the Italian army's equipment, it was generally lacking, or unreliable, or not around in enough numbers. Mind you, the majority of this is due to a lack of industrialization in Italy, Italian industrial capacity at the star of the war was a fraction of any of the other major powers, and its automotive industry (unlike now) was very small, wholly insufficient and inexperienced in what became a mechanized war.
Now, for morale and leadership, i cant give you an answer, or at least a good one, its not something ive made any serious study of. anything i put here would be speculation and likely poorly remembered conjecture, so ill leave it to someone else to hopefully answer.
FYI, there are a few posts in the FAQ that may be of interest
Why was the Italian Army so pathetically inept during WWII? by /u/Quirite
How bad really was the WWII Italian army, and what made them that way? by [deleted]
Why was the Italian campaign on the side of the Axis during World War two such a failure? by /u/LordHighBrewer
How much independence did warships have during WWII by /u/Quirite