After the Allied invasion of Italy, an exchange rate was set at US $1 = 120 lire (1 British pound = 480 lire) in June 1943, reduced to 100 lire the following month. In German occupied areas, the exchange rate was set at 1 Reichsmark = 10 lire. After the war, the value of the lira fluctuated, before Italy set a peg of US $1 = 575 lire within the Bretton Woods System in November 1947. Following the devaluation of the pound, Italy devalued to US $1 = 625 lire on 21 September 1949. This rate was maintained until the end of the Bretton Woods System in the early 1970s. Several episodes of high inflation followed until the lira was replaced by the euro.

What was italy's currency before the euro? Okie... think carefully first, then make a decision:
To answer the question, consider the following: Several episodes of high inflation followed until the lira was replaced by the euro. So, the answer is the lira.