German finance minister repeats message on Irish "special case" status

Germany's finance minister repeated on Tuesday that Berlin views Ireland as a special case among bailed-out euro zone states, but did not make clear if that meant the terms of Ireland's bank rescue might be eased.

"We know the very specific situation from Ireland, that Ireland is a special case. The euro group will continue to take this into account," Wolfgang Schaeuble said at a joint press conference in Dublin with his Irish counterpart Michael Noonan.

"There is no misunderstanding, we agree 100 percent, we are confident. And of course, we will be as supportive (as in the past)," he added.

Schaeuble repeated the message from German Chancellor Angela Merkel and Irish Prime Minister Enda Kenny, who issued a joint statement reaffirming that euro zone leaders would examine ways of improving Ireland's bank rescue.

"It's always dangerous in Europe that there are expectations created which cannot be delivered. That leads to deceptions in markets ... If we don't stick to the same sentences, there will be some innovative interpretations," said Schaeuble.

Schaeuble met Noonan and Minister for Public Expenditure Brendan Howlin for direct talks on Monday about Ireland's EU/IMF program, developments in the euro zone and objectives for Ireland's presidency of the EU, among other matters.

The German finance minister added he is 100 percent confident that Ireland is on track to emerge from its bailout program next year.

Dublin is in talks with the European Commission and European Central Bank to ease the burden on state finances from banks which failed when a property boom turned to bust.

They are exploring two avenues: a retroactive direct investment by the euro zone's ESM bailout fund in "good banks", and a restructuring of 31 billion euros in promissory notes.

Ireland hopes to secure a deal on the promissory notes - high-interest IOUs used to recapitalize the former Anglo Irish Bank, now called the Irish Bank Resolution Corporation - before their next payment falls due next March.

However, it has been struggling to secure support for ESM investment given German opposition to allowing the fund to cover such 'legacy debts'. Chancellor Angela Merkel has acknowledged though that Ireland is a "special case", however, as repeated in her joint statement with Kenny on Monday.

Irish finance minister Noonan said progress is being made in talks with the ECB and a deal on the Anglo Irish Bank promissory note. Schaeuble declined to comment on the matter.

(Reporting by Lorraine Turner; Editing by Catherine Evans)