The narrator explains that after the Allies invaded Sicily, all hell broke out in Greece. The Greek Civil War began, as did the Cold War, and the Americans couldn't believe that the Greek communists were committing such atrocities. In regards to the rest of the war, the Allies begin to gain the upper hand. This perplexes the Germans, but the Italians surrender happily. In Cephalonia, the Italians listen to the BBC report that the Allies are marching through Italy. Weber continues to attend La Scala meetings, but he's cold and distant.
Because Weber's beloved Nazi ideals are being struck down as the Allies enjoy wins, it shows him that his politics aren't actually able to create the world he'd like to see. Put another way, he's realizing that simply believing he's right isn't enough to make him right, as there's more to winning a war than simply believing in what he's fighting for.
One evening, Corelli asks Pelagia what they'll do when the Italians have to surrender before the Germans do. He says they can't get married, and General Gandin won't let the Italians disarm the Germans now. Pelagia sees Father Arsenios and Bunnios and runs to talk to them. She asks Bunnios when the British are coming. He doesn't know, but he can tell her that the Germans aren't sending more troops to Greece. She relays this to Corelli. He remarks that Arsenios has a fantastic voice and tells Pelagia about the songs he heard sailors singing earlier. He begins to hum one that makes her laugh; it's the national anthem.
Remember that General Gandin is in charge of the Italians in Greece. His unwillingness to allow the Italians to act suggests that he's either sympathetic to the Germans themselves or unwilling to admit defeat. It's worth considering that even though it'll soon be revealed that Gandin isn't actually as powerful as he wishes he were, he still holds some degree of power because of his role in the war and likely wants to hang onto it.