Italian vs European

Italian and European both are nouns.

Word	Noun	Adjective	Verb	Adverb
Italian	Yes	Yes	No	No
European	Yes	Yes	No	No

As nouns, European is a hypernym of Italian; that is, European is a word with a broader meaning than Italian:

Italian (noun)	European (noun)
the Romance language spoken in Italy	a native or inhabitant of Europe
a native or inhabitant of Italy

Italian (adjective)	European (adjective)
of or pertaining to or characteristic of Italy or its people or culture or language	of or relating to or characteristic of Europe or the people of Europe