Ok AFD so lets start a little from the beginning.
The MXP scala project started about 2 years ago, it was planned to operated EMB 170 (I think) out of MXP by EN.
Last year they changed the a/c from EMB to A319, still in LH colours, still operated by EN. In september EN selected pilots for the A319 base MXP and trained some of their pilots to the A319, some already took houses near MXP, when somewhere in October the whole thing was stopped.
A/C are operated by LH crews now.
Now LH wants to create a company called LH Italia with an italian AOC to operate this flights and they want to hire their own pilots (italian, german, EU what ever), so far is correct, BUT the whole thing still means, a/c with more than 70 seats in LH colours on LH routes operated by non LH pilots, which as we know is not according to the LH contract.
So nothing so far has changed from the EN project to the LHITA project.
It has been stopped once, it could be stopped a 2. time.