London (CNN) -- Just one decade after the European single currency was launched amid fanfare and fireworks, its future continues to look uncertain as the debt crisis that engulfed Greece, Ireland and Portugal threatens the entire bloc -- and the wider global economy.
In a bid to resolve the crisis, a majority of European leaders in December reached a deal for a new intergovernmental treaty to deepen the integration of national budgets. Britain refused to back the agreement while three other countries -- Hungary, Sweden and the Czech Republic -- said they would consider the plan.
European leaders were optimistic that a proposed fiscal compact, designed to ensure that governments do not spend beyond their means and rack up unsustainable debts, could be signed by the end of January.
But while solid demand at recent debt auctions in Italy and Spain calmed some investors, a Reuters report Friday that said ratings agency S&P could downgrade several eurozone countries at some point sparked a fresh bout of worries.
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Before the December summit, economists had feared that if European politicians failed to reach a consensus the eurozone crisis could trigger a global slump. Some went even further -- Alain Juppe, ex-French prime minister, told French media that the crisis "raises the specter of a return to violent conflict on our continent."
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Many analysts saw it all coming of course, arguing that one fiscal system could never work for 17 EU countries that adopted the euro, serving more than 330 million people.
The flaws were exacerbated after some countries were suspected of fudging their numbers, including Greece which in 2004 admitted it gave misleading information to gain admission to the eurozone. The crisis exploded after Greece revised its figures to show its 2009 budget deficit would be 12.7% of gross domestic product -- far higher than the eurozone limit of 3%.
The bloc -- whose financial fractures may not have been apparent during the boom years -- then began to unravel.
After Greece's dire numbers were revealed, investors panicked and the country was unable to raise money to fund itself. The country was forced to take a €110 billion bailout from its eurozone peers and the International Monetary Fund.
But Greece's bailout, rather than stemming the panic, served as a harbinger to the debt crisis.
The European Financial Stability Facility, or European bailout fund -- set up to deal with further financial stumbles -- was quickly tapped again.
Ireland, felled by a black hole in its banking system, was forced to take a €67.5 billion bailout package in November 2010. After the markets then closed their doors to Portugal, it was also forced to take a €78 billion bailout.
The troubled nations implemented austerity measures to try to rein in their hefty piles of debt, but confidence in the bloc's ability to stabilize itself continued to fall.
The crisis may yet engulf Italy, which makes up 17% of the eurozone economy. Greece, Ireland and Portugal make up less than 6% between them.
And so Europe's politicians and officials have desperately tried to sort out the mess by coming up with ideas including boosting the bailout fund, bringing the disparate economies closer financially, and tapping other markets for funds.
Their previous measures proved ineffective, as the markets -- and the world -- remained unconvinced at the bloc's ability to survive in its existing form.
Germany and France, the largest economies in the bloc, led the call for EU countries to unite and find a joint solution. Now the majority of member states have come up with a new deal to be ready by March 2012.
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The 17 members of the eurozone that share the single currency have agreed on an intergovernmental treaty to deepen the integration of national budgets, and six other EU nations support this plan. Another three have agreed to consider it. They have also agreed to hand over the running of the Europe's bailout funds to the European Central Bank and to add €200 billion to the International Monetary Fund.
Britain remains isolated by the deal that will now be tested by the markets.
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