Q&A: What now for the Euro?

We take a look at three possible scenarios that could happen next in the eurozone and what it will mean for Britain...

Scenario One: The euro collapses

Yesterday’s deal does nothing to tackle the debt mountain threatening the future of the single currency.

Many observers believe the euro still faces a major battle for survival and could collapse.

Other EU leaders would blame Britain for failing to come to the euro’s aid in its hour of need.

But Britain’s key financial services sector would have been protected from meddling by Brussels.

Although a collapse of the euro would be damaging, Britain would remain better off on the outside.

Verdict: Cameron vindicated

Scenario Two: The euro succeeds

React ion in the bond market yesterday suggests experts believe yesterday’s deal does not go nearly far enough but it remains possible the euro could survive – and even thrive – in the long term if the new grouping eventually gets its act together.

A powerful new eurozone could be in a position to shape the single market to its own advantage, riding roughshod over British interests.

In this scenario even the Prime Minister’s hard-fought defence of the City may look inadequate.

Verdict: Cameron proved wrong

Scenario Three: It limps on in its present state

The new European deal faces huge legal and political hurdles but could provide enough confidence for the euro to struggle on.

The politically powerful new eurozone bloc may try to take revenge against Britain by harming our interests in other areas.

But the protections secured for the financial services industry – which accounts for more than 10 per cent of our GDP – would more than outweigh this.

The Government might also come under pressure to hold a referendum on leaving the EU altogether – holding out the prospect of a new free trade deal.

Verdict: Cameron vindicated