The Irish Independent reports that Central Bank governor Patrick Honohan hinted yesterday that the final cost of Irish Nationwide's bailout could rise to more than €3bn -- well above the €2.7bn already announced.

Prof Honohan raised the spectre of Nationwide's bailout less than a week after it emerged that the bill for Anglo Irish Bank's rescue had jumped to €24bn and could rise even further. Addressing an audience in Beijing as part of his tour of Asia's financial centres, Prof Honohan acknowledged the "great focus on the budgetary cost of bank recapitalisation". He said: "Anglo may impose a net cost to the Government of about €22bn-€25bn, to which can be added about €4bn -- mainly to cover one small building society."

The "small building society" referred to is understood to be Irish Nationwide. The €4bn figure also includes the €875m earmarked for EBS, implying up to €3.125bn for Nationwide. A spokesman for Nationwide last night declined to be drawn on Prof Honohan's comments, but the building society's chairman recently admitted that the bailout cost could rise.

Speaking on the sidelines of Nationwide's AGM in May, chairman Danny Kitchen said the building society could need extra cash if future losses "exceeded a certain level".

Nationwide is transferring €8.5bn of its €10bn commercial loan book to the National Assets Management Agency (Nama), while the building society also has about €2bn of mortgage loans on its books.

"Irish Nationwide's capital requirements will be determined by the final Nama discounts," a spokesman for the Department of Finance said last night.

"The governor's comments were merely reiterating what has been known for over a month (that the capital requirement could rise, depending on Nama)."

Nama applied a 58pc haircut to Nationwide's first tranche of loans, while a 72pc discount was applied to the second batch.

The discounts for future batches could vary significantly, given the diverse range of loans involved.

Irish Nationwide's capital requirements could also be pushed up, depending on the outcome of the Financial Regulator's PCAR test, which is designed to test a bank's ability to withstand future shocks.

Opposition politicians last night slammed the latest Nationwide predictions, with Fine Gael's deputy finance spokesman Kieran O'Donnell describing the rising costs as a "damning indictment" of the Government's bank policies.

Labour's finance spokeswoman Joan Burton said: "At every stage of Ireland's banking crisis, the Government has insisted that it has the costs under control, only for this to be blown out of the water by the next multibillion-euro announcement."

Astonishing

Against the backdrop of Ireland's rising bailout costs, Prof Honohan said that while "there was much to be said" for policies that would limit the size and complexity of banks, he doubted whether future bank failures could be avoided definitively.

"I am not altogether optimistic that there will quickly be a full solution that both preserves the effectiveness and cost efficiencies of modern finance and genuinely removes the need for rescues in all situations," he stressed.

The Central Bank governor also described Anglo Irish Bank's loan losses as "astonishing" and pointed out that they amounted to more than 40pc of the bank's entire portfolio.

The Irish Independent also reports that redundancies are forecast to top 10,000 across the financial services sector by the end of the year.

The Irish Bank Officials' Association (IBOA) said 6,000 people lost their jobs in the last 18 months and predicted over 4,000 would be shed in the next six months.

AIB is expected to axe thousands of jobs when it presents a major restructuring plan to the EU, which is expected to be rubberstamped in September.

Further job losses were announced in the fallout from the banking crisis this week, with credit card giant MBNA announcing 66 compulsory redundancies in Carrick-on-Shannon, Co Leitrim.

The announcement came just a month after Bank of Ireland said it would seek 750 voluntary redundancies by the end of next year.

Last week, Enterprise Minister Batt O'Keeffe wrote to Bank of Ireland and AIB seeking "urgent clarity" on their redundancy plans.

He has invited the banks to meet him early next month to outline the number, location, and skills of the employees who may be affected, but no dates have been scheduled yet.

IBOA general secretary Larry Broderick said he expected a "substantial" jobs announcement at AIB later this year.

"There are huge rumours out there," he said.

"I'm not going to speculate, but the number there would be significant.

"While we appreciate that AIB is still in talks with the EU Commission over its viability plan, we believe that the broad thrust of its business strategy should now be in place and open to comment."

He said there should be some job opportunities at NAMA and financial institutions as they began lending again to businesses.

The union leader called on Mr O'Keeffe to launch a jobs strategy, but welcomed his decision to ask the financial institutions to outline their redundancy plans.

There have been over 6,000 job losses in the financial services sector in the last 18 months due to redundancies, the non-replacement of retiring staff and non-renewal of temporary contracts.

Of these, the union said 1,700 jobs had gone at AIB, 230 at Anglo Irish Bank, 1,800 at Bank of Ireland and 1,000 at Ulster Bank.

A further 750 jobs had been lost at Halifax, 150 at National Irish Bank, 120 at Permanent TSB, 150 at Postbank, and 200 at Royal Bank of Scotland Technology Services.

It said there had also been further smaller job losses in the operations of American banks, including Merrill Lynch and Citibank, and insurance firms such as Quinn and Axa.

The Irish Times reports that high failure rates in maths, science and business subjects are the most striking feature of the Leaving Cert results published this morning.

More than 4,300 students failed maths in the exam, while failure rates in science subjects at both higher and ordinary level were far higher than in other subjects.

Failure rates were also relatively high across the main business subjects.

The “honours” or ABC rate for higher-level Irish and maths is down this year by 5.5 per cent and 3 per cent respectively – the first decline since 2005. The drop in grades comes after concerns were raised about grade inflation and a “dumbing down” of the Leaving Cert.

With record numbers seeking college places this year, CAO points for most major courses are expected to increase when the first round of offers is published next Monday.

Minister for Education, Mary Coughlan yesterday ruled out the return of college fees during the lifetime of the Government.

Among the most popular subjects, biology had the highest failure rate (9 per cent) at higher level. Failure rates were also relatively high in chemistry (8 per cent); physics (7 per cent); business (6.5 per cent ); and economics (5 per cent). This compares to failure rates of less than 2 per cent for Irish and English.

The failure rate for chemistry at ordinary level was 18.5 per cent.

In maths, the failure rate at ordinary level declined marginally from 10.4 to 9.8 per cent. But only 16 per cent of students – or fewer than 8,500 – took the higher-level paper. This is about a quarter of the figure taking higher-level English.

On a more positive note, the new more “user-friendly” Project Maths course – examined for the first time this year – attracted a higher percentage of higher-level students (18.7 per cent) from the 24 schools in the pilot programme.

Ms Coughlan promised yesterday to press ahead with her plan to award bonus CAO points for maths, despite concerns raised by UCD and other colleges.

Overall, the Leaving Cert results tend to reflect Ireland’s standing in international league tables.

While Ireland is among the top-ranked Organisation for Economic Co-operation and Development (OECD) nations in reading and literacy, it is ranked only in mid-table in both science and maths.

Last night, the group representing 600 US companies in Ireland called for dramatic reform of the education system.

Joanne Richardson, chief executive of the American Chamber of Commerce in Ireland, said the continuing failure rates in subjects such as maths, chemistry and physics was disappointing “considering the focus on developing a smart economy”.

The employers’ group Ibec said fewer than 50 per cent of maths teachers at second level have their main qualification in the subject.

Fine Gael education spokesman Fergus O’Dowd said Ireland needed high levels of achievement in science and technology, but instead of seeing positive moves in this area, the Leaving Cert results had confirmed disappointing trends. Ms Coughlan also promised yesterday that a report on a series of blunders in this year’s exams would be published shortly.

Results are available from early this morning in schools. Students can also access their examination results from midday today by quoting their Personal Identification Number (Pin) and examination number online at examinations.ie, or by phoning 1530 719 290 for callers in the Republic or 00353 1 6885312 for callers from outside the Republic.

Results: main points:

• Only 16 per cent of students sat the higher-level maths paper while 4,300 failed the subject across all levels.

• The honours rate declined by over 2 per cent in higher-level accounting. Key sections of this paper were omitted when the paper was first distributed in 16 south Dublin schools.

• The number of A, B or C grades in higher-level English grades rose by 0.6 per cent – despite the surprise omission of poet Eavan Boland in the June exam.

• Concerns over grade inflation may be having an impact – the honours rates dipped this year in Irish and maths.

• Among the most popular subjects, music and Irish have the highest honours or ABC rate at higher level. Biology and business have the lowest.

The Irish Times also reports that the Government must change the way it handles the public finances and accept greater EU surveillance of its policies in order for Ireland to be a successful member of the euro zone, a new report by the National Economic and Social Council (Nesc) claims.

In The Euro: An Irish Perspective, the council warns that the future stability of the euro zone “depends on more effective surveillance and co-ordination” of the financial health of EU members.

The council favours a greater sharing of information between EU members as part of an “economic government” for Europe.

Mandatory surveillance of economic policies and penalties for not adhering to joint fiscal policies could be part of the new regime, it suggests.

It also calls for stronger EU-wide regulation of financial services in order to prevent “irresponsible” banking practices “which threaten the prosperity of the euro area”.

The report states that Ireland’s approach to fiscal policy, prices, costs and financial regulation were “not sufficiently adapted to the disciplines of the single currency”.

However, membership of the euro has been beneficial to Ireland, and if Ireland had not joined the single currency it is likely that the economy would have fared worse over the past two years.

Greater “popular identification” with the euro and the responsibilities that come with membership of the euro zone would enhance the effectiveness of the single currency.

“This requires a greater shared understanding of how the euro can support the pursuit of stabilisation, employment and sustainable prosperity,” the council says.

Nesc states that future fiscal policy must be counter-cyclical, an approach whereby governments save during times of high tax revenues and spend in order to stimulate the economy during recessions.

Between 2000 and 2007, the Government favoured what are known as pro-cyclical economic policies, whereby money gleaned from bumper tax years was spent, meaning there was little cushion to protect public finances when tax receipts went into decline.

“The severity of the current crisis should make us absolutely determined to learn the correct lessons,” the report states. In particular, Ireland needs to make “an unambiguous reaffirmation” of its commitment to low debt.

“High indebtedness brings a severe reduction in national sovereignty, as domestic options are increasingly in the hands of international markets and ratings agencies,” the report states. Fiscal policies must be “counter-cyclical, sustainable and respect the EU Stability and Growth Pact”, it adds.

During the recent economic crisis, EU members including Ireland swiftly abandoned deficit targets set by the EU under the Stability and Growth Pact, as such targets became unachievable.

The council accepts that any reform process would involve “high-level bargaining” between heads of government and the EU institutions, but it adds that Ireland has “a strong interest in the success of this process”.

The council concludes that the euro faces “severe” challenges in the future. These include the recovery of the European economy, the continuing risks to the financial system and assessing the effectiveness of the €110 billion in financial support provided to Greece earlier this year by euro-zone governments and the International Monetary Fund (IMF).

Nesc, which advises and reports to the Taoiseach on economic strategy, also highlighted the need for price and cost-control to maintain Ireland’s competitiveness.

The council is chaired by Dermot McCarthy, the secretary general of the Department of the Taoiseach, and comprises representatives of trade unions, employer groups, voluntary organisations and others.

The Irish Examiner reports that more frequent flooding, warmer summers and severe storms are expected to present major challenges to Irish businesses over the coming years.

A Forfás report on the future of climate change found that in line with global patterns, Ireland’s climate has changed over the past 100 years and the impacts are expected to increase in the coming decades.

Ireland’s economy and society will have to adapt to the climate getting warmer by between one to four degrees celsius by the end of the century, with the south and east of the country predicted to be the warmest regions, the report said.

Also rainfall patterns are expected to change, with wetter winters in the west and drier summers in the south-east.

Flood events are likely to become more frequent too, according to the report. Sea levels are conservatively predicted to rise by 60cm by the year 2100.

These factors coupled with more frequent and severe stormy weather is expected to present significant challenges for firms.

Chief executive of Forfás, Martin Shanahan, said: "The key is to facilitate Irish businesses in planning ahead so they can minimise risks, reduce costs and realise opportunities arising from climate change adaptation.

"Building awareness and capacity among businesses through supports from business representative bodies, enterprise development agencies and other stakeholders will be central to ensuring successful business adaptation in Ireland."

Forfás said changes in climate can also bring opportunities as well as risks to Irish businesses.

"Given that Ireland is expected to be relatively less affected by climate change than our key competitor countries, properly managed, Ireland can have competitive advantages through access to significant water resources and an ongoing temperate climate.

"This can present opportunities for indigenous companies to realise these competitive advantages and to promote Ireland as a relatively low risk location for business activity," said Mr Shanahan.

Enterprise, Trade and Innovation Minister Batt O’Keeffe said the report uncovered strong business opportunities for Irish firms which the Government’s enterprise agencies should target.

"Making infrastructure more climate-resilient presents opportunities for the construction sector while increases in global food demand due to global climate challenges can boost our agri-food sector."

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