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LONDON, Feb 7 (Reuters) - Greece's two-year government bond yield soared to its highest level in more than seven months on Tuesday on growing worries over whether the European Union and the International Monetary can reach an agreement over a third Greek bailout.
Two-year yields spiked over 100 basis points to within striking distance of 10 percent, according to Reuters data. The yield on a short-dated Greek bond maturing in July rose to a one-year high near 16 percent.
In its annual review of Greece's economic policies, the IMF said on Monday that most of its board directors favoured a Greek fiscal surplus target of 1.5 percent of gross domestic product by 2018, while some directors favoured the higher 3.5 percent target sought by Greece's European lender group.
The rare split among IMF directors reveals some divisions in their views of Greece's fiscal performance and debt sustainability as the Fund considers whether to participate in the new bailout for Greece needed by mid-2018.
Reporting by Dhara Ranasinghe, editing by Nigel Stephenson