I understand this song in a different way, the author is in wonder about how people can still manage to live a near "normal" life in their extraordinary conditions, how laughter, contests and simple, trivial things can make their way in the middle of bombing and death, and that these things are what make it possible for people to bear the situation, the counterpart comes when he talks about love (the part in Italian) here we can see the real desperation they are living in, that's why they can't believe in or hope for love anymore, even if we are telling them it will come back in the end. They are living a simulation of normal life in order not to die from mere panic.
I hope I will never forget the picture of the beauty contest it is inspired in, I mean the one with all the girls carrying a poster that reads "Don't let them kill us".