BRUSSELS, July 18 (UPI) -- European Union leaders worked to finalize a bailout package for Greece and prevent a worsening of the region's debt crisis ahead of a meeting Thursday.
Eurozone leaders also are trying to resolve a long-time feud between Germany and the European Central Bank over the role of private bondholders, MarketWatch.com reported Monday.
"If there's nothing conclusive that makes sense to the markets and eases the burden on the [peripheral nations], the market is not going to be too impressed," possibly sending borrowing costs for the troubled countries such as Spain and Italy to unsustainable levels, said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin.
Thursday's meeting could be considered a "last chance" for European leaders to take action needed to avert a breakdown of the economic and monetary union, McQuaid said.
The worries come after German Chancellor Angela Merkel said on state television Sunday she would not attend Thursday's summit in Brussels unless an agreement is on the table to make private-sector bondholders share in the cost of a new Greek bailout.
However, ECB President Jean-Claude Tricket said the central bank wouldn't accept as collateral bonds of any government declared to be in default.
"If a country defaults, we will no longer be able to accept its defaulted government bonds as normal eligible collateral," Trichet said. "The governments would then have to step in themselves to put things right. That would then be their duty."
