It was really great, I was really proud of the team, "said Germany coach Silvia Neid.
Simone Laudehr, carrying a knee injury, shot the winning goal in the 26th minute.
Tim seems to be significantly more involved with the game and concentrated than they had in the previous game which they lost 0-1 against Norway. It was the first defeat for German women in European championship game for at least 20 years.
"We held out well against an aggressive, Italian-trained, and we fought with everything we had," said Neid.
The team will play against Sweden in the semi-finals - but without top forward Celia Okoyino da Mbabi, who strained muscle in his right thigh.
Sweden Wednesday's game should be a humdinger, said Neid, because Sweden would have the advantage of the home crowd.
"The Swedes have a very strong team and favorite. Youth teams but why we are afraid of them?" Neid said.
Sweden made it through to the semifinals with an easy 4-0 victory against Iceland.