EU/IMF lenders to resume Greece inspection after stress tests [Update]

Greece’s EU and IMF lenders are leaving Athens after the first round of talks on a crucial bailout review and will return after European bank stress test results are announced, Greek officials said on Tuesday.

The inspectors had been expected to leave later this week to attend the IMF’s annual conference in Washington and return next week, but are now expected back around the start of next month.

Finance Minister Gikas Hardouvelis denied the inspectors were leaving because of a disagreement after Greek newspaper To Vima reported the departure was due to a failure to agree on any outstanding issues and because of a confidence vote in parliament this week.

Athens needs to successfully – and swiftly – conclude its latest bailout review to make good on hopes to exit its EU/IMF bailout at the end of the year, well ahead of its scheduled end in 2016.

Investor jitters about whether Athens will be able to pull off the early exit and the threat of snap elections have pushed up Greek bond yields in recent weeks, with 10-year bond yields rising to 6.8 percent on Tuesday, their highest level in a week.

Prime Minister Antonis Samaras has sought to quell the speculation of snap elections by calling a confidence vote on Friday, but that has failed to impress investors who fear a prolonged period of political deadlock.

The Athens main stock index also fell 2 percent in afternoon trade to hit a one-year low, with traders citing political uncertainty as weighing on the shares.

“Investors do not see any political solution soon. The government is expected to win the confidence vote but this will mean things will be pushed back for another five months,” said Takis Zamanis, a trader at Beta Securities.

A second trader, who declined to be named, said investors were worried about political paralysis in the coming months ahead of expected snap elections. [Reuters]

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