Deem appropriate to hold and fine Italian (5,3)
I believe the answer is:
think fit
'deem appropriate' is the definition.
(to think something fit is to think it appropriate)
'hold and fine italian' is the wordplay.
'hold' becomes 'think' (to hold is to maintain a particular opinion).
'and' means one lot of letters go next to another.
'fine' becomes 'f' (abbreviation).
'italian' becomes 'it' (abbreviation for Italian).
'think'+'f'+'it'='THINK FIT'
'to' acts as a link.
(Other definitions for think fit that I've seen before include "Consider appropriate, choose to do" , "Decide to do without good reason" .)