The euro will emerge stronger from the sovereign debt crisis currently engulfing the single currency, but the cost of a bailout may absorb much if not all of the EU budget on areas like agriculture and fisheries, an SNP MEP has warned.

Speaking to Holyrood ahead of last weekend’s crunch summit of European leaders in Brussels, Alyn Smith said the EU faces an “existential threat” and warned Scotland must ensure it is well placed to benefit from the fundamentally different system that emerges from the current crisis.

Smith, who is set to join the European Parliament’s Committee on Industry, Research and Energy in the new year, predicted the development of “an EU energy market that is much more about rules than money,” and reiterated his belief that the Scottish Government and Scottish Parliament still have a way to go in understanding the level of uncertainty surrounding the European project. Last month Smith asked the Scottish Parliament Rural Affairs Committee: “If there is to be no EU agriculture budget at all, what is our plan B?” Despite the dark clouds hanging over the future of the euro in its current form, Smith said the SNP maintains a “robust” position on its potential future as an independent nation, with a stated aim of joining a revived currency “at the right time, at the right rate, [and] subject to a referendum”.

Smith repeated his belief that the single currency will be strengthened by the response to the debt crisis, but would not guarantee the eurozone will not shed members during the reform process. “I think there’s still a big question mark over Greek participation going forward, but the euro itself is bigger than any single member. The euro construction as it stands I believe will be reformed in a much tougher, much more solid direction. I think that makes it more attractive, not less,” he said.

Despite his vote of confidence in the future of the currency, Smith said the Scottish Government will continue to monitor its position “as things are so much in flux,” adding that “as facts change we have every possibility to change our mind.” Smith drew an unfavourable comparison with the approach of the UK Government, whose Conservative leaders he said appeared to have “no conception of how the EU works,” and whose truculence has excluded the UK from taking a leading position in the formulation of a renewed European system. He continued: “George Osborne, William Hague, David Cameron have been gratuitously offensive to our friends and colleagues and in so doing have made whatever the UK wants not to happen almost inevitable. That’s just not good enough for Scotland.

“David Cameron has voluntarily made himself redundant within the European context, and it’s only now the penny seems to be dropping just how many friends he’s lost.”