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maltatoday, WEDNESDAY, 17 MAY 2017 11 Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way Greece sinks back into recession as talks with creditors drag on Greece has fallen back into re- cession for the first time since 2012, official figures from Eurostat showed yesterday. Greece's economy returned to recession in the first quarter as delays in concluding talks between the government and its creditors raised the spectre of another debt drama. Gross domestic product contracted 0.1% in the first three months of the year after shrinking 1.2% in the previous quarter, the Hellenic Statistical Authority said. The seasonally adjusted contraction was 0.5% from a year earlier. The figures come as Greek unions begin two days of industrial action against cuts to pensions and tax rises insisted on by creditors. Greece is still struggling to secure a new bailout from international lenders. Its government hopes the loan payment will be approved by a meeting of eurozone finance ministers on 22 May. The International Monetary Fund (IMF) said last week that it needed more time to agree a deal on debt relief for Greece, one of the conditions of the organisation's participation in the bailout. The Greek government needs the bailout to make payments on bonds that mature this summer. However, the programme was thrown into doubt in February when splits were revealed within the IMF. The IMF suggested the Greek government's debt to GDP ratio was unsustainable and that austerity measures were holding back growth. Government debt currently stands at around 179% of GDP. The IMF's suggestion that Greece should be granted debt relief by other creditors was rebuffed in the face of strong opposition from Germany, amongst other Eurozone countries. However, at the start of this month the Greek government secured a deal with creditors in return for further reforms to its economy, including more cuts to pensions and higher taxes. The deal was broadly welcomed by investors, who bought Greece's government debt at a rate not seen since 2014. The yield, which moves inversely to price, on a 10- year Greek government bond maturing in 2025 has fallen steeply in recent months, reaching a low of 5.65%, according to Tradeweb. Bond prices, which move inversely to yields, have been driven upwards by the renewed confidence in the bailout deal from Greece's creditors, and the consequent lower likelihood of the government defaulting. However, the prospects for a return to growth at the pace seen before the debt crisis first flared up in 2011 seem distant, with unemployment still at 23.3% and youth unemployment far higher, at 48%. EU- Singapore trade deal up to national parliaments The European Court of Justice (ECJ) yesterday ruled that free trade deals with the European Union must also be approved by the bloc's 38 national and regional parliaments, in a decision that could significantly slow down the bloc's planned trade teals. The judges said that a free trade agreement between the European Union and Singapore cannot be enforced until all of the bloc's member states ratify the agreement. "The free trade agreement can, as it stands, only be concluded by the European Union and the Member States jointly," the court said in a statement on the decision. The legal opinion at the ECJ could delay progress towards a UK free trade deal with the EU during the Brexit negotiations. The European Commission negotiates trade deals on behalf of the EU. But the ECJ says the EU- Singapore deal, concluded in 2014, has parts that affect powers enjoyed by member states. The ECJ said that, although some areas of the Singapore deal fall within the EU's exclusive competence, two areas require member state input: "Non-direct foreign investment" and "dispute settlement between investors and States." The EU is currently pursing trade deals with Mexico and Japan as well as eyeing a crucial deal with the United Kingdom as it exits the EU. The verdict makes it more likely that any UK-EU free trade deal will have to be ratified by national and regional parliaments in the EU. The Singapore deal is not as wide-ranging as the EU-Canada trade deal (Ceta), which was nearly scuppered by objections in Wallonia, the mainly French-speaking part of Belgium. Ceta will take effect provisionally in the coming weeks, but full implementation still requires the approval of 38 parliaments in the EU - national and regional. The UK has to negotiate the terms of its exit from the EU by the end of March 2019. But the UK government also wants to make speedy progress towards a comprehensive new trade deal with the EU. The Commission says the terms of UK withdrawal - including thorny budget issues - must be agreed before any trade negotiations with the UK. The EU-Singapore deal is the bloc's most ambitious trade agreement in South-East Asia