The various Euclid imaging surveys will become a reference for studies of galaxy morphology by delivering imaging over an unprecedented area of 15 000 square degrees with high spatial resolution. In order to understand the capabilities of measuring morphologies from Euclid-detected galaxies and to help implement measurements in the pipeline, we have conducted the Euclid Morphology Challenge, which we present in two papers. While the companion paper by Merlin et al. focuses on the analysis of photometry, this paper assesses the accuracy of the parametric galaxy morphology measurements in imaging predicted from within the Euclid Wide Survey. We evaluate the performance of five state-of-the-art surface-brightness-fitting codes DeepLeGATo, Galapagos-2, Morfometryka, Profit and SourceXtractor++ on a sample of about 1.5 million simulated galaxies resembling reduced observations with the Euclid VIS and NIR instruments. The simulations include analytic S\'ersic profiles with one and two components, as well as more realistic galaxies generated with neural networks. We find that, despite some code-specific differences, all methods tend to achieve reliable structural measurements (10% scatter on ideal S\'ersic simulations) down to an apparent magnitude of about 23 in one component and 21 in two components, which correspond to a signal-to-noise ratio of approximately 1 and 5 respectively. We also show that when tested on non-analytic profiles, the results are typically degraded by a factor of 3, driven by systematics. We conclude that the Euclid official Data Releases will deliver robust structural parameters for at least 400 million galaxies in the Euclid Wide Survey by the end of the mission. We find that a key factor for explaining the different behaviour of the codes at the faint end is the set of adopted priors for the various structural parameters.