Why are you so upset? The end of the world happened. Anything is possible and Mediterranean Europe and North Africa coming together makes a whole hell of a lot more sense than Argentina and Iceland. They kinda have this crazy little thing called proximity and shared history. Plus Franco-Iberia is in general a pretty progressive nation, I think it makes perfect sense for them to reach out to their neighbors and try to form a greater union instead of descending into hokey tribalism.(which is something my Byzantines are all over, but they're more conservative) Franco-Iberia could easily be seeing this as an opportunity to forge a new world without all the bad blood of the past. Also if you honestly think that Britain and Germany coming together is absurd or illogical then I am wont to believe that your history education ended in 1944. Honestly the system set up by the UKE isn't crazy, its a turbo-capitalist nation made up of a bunch of groups that have a lot to offer each other economically, which is kind of a thing that rabid capitalists would value far more than ethnicity or history when empire building. 

You just gotta chill dude.