The Taoiseach has said that he expects Ireland will return fully to bond markets late next year, but that a deal on easing bank debt is necessary to ensure a successful bailout exit.

In an interview with Reuters last night, days before Ireland takes over the EU presidency, Mr Kenny said he is confident an easing of repayment terms on promissory notes will be agreed by a March deadline.

He also called on European leaders to stick to a separate promise to address the cost of Ireland's bailout programme.

"We would hope to be the first country to actually exit [a bailout] in 2013 but that level of support that has been committed to Ireland is very necessary to be carried through," Mr Kenny said.

"This assistance and this support is very necessary for Ireland to exit the programme," he said, adding that the Government would not need to seek a second bailout.

Ireland takes over the rotating EU presidency in January for a six-month period in which it hopes to strike the bank debt deal with the European Central Bank.

This would help pave the way to exit the EU/IMF rescue programme on schedule at the end of 2013.

Ireland is not yet in a position to resume monthly bond auctions and the International Monetary Fund warned this week that durable market access depends greatly on Europe delivering on its commitments to the country.

Mr Kenny said he envisaged a sustained return to debt markets in the second half of 2013, adding that a deal on the €31bn of promissory notes would help this greatly.

"It would be much easier to do that if we have a conclusion to the matter of the promissory notes and ECB negotiations which would obviously make it easier for us to have a full return to the markets... probably in the second half of the year."

The Taoiseach said he hoped Ireland's EU presidency would be one of solutions, not least when it comes to finalising a seven-year EU budget early next year.

Asked if one of those solutions would be clarity on whether Spain would seek a full bailout, Mr Kenny said he was not sure that Spanish Prime Minister Mariano Rajoy intended to do so "at least as yet" but that he had told Mr Rajoy of the intensive and invasive conditions that come with seeking help.

Mr Kenny said he hopes to gain some certainly as to whether Irish banks can be retroactively recapitalised when Europe is able to use rescue funds to shore up struggling lenders in 2014.

"I'm glad that the supervisory mechanism has been put in place. While that may not be concluded by the end of 2013, that does not preclude the question of the [as yet unclear] definition of legacy assets being [put on the table]," he said.

He said there were signs that confidence was returning to the country, pointing to recent fund raising by banks and modest economic growth.

However, he added that with unemployment "unacceptably" high at nearly 15% and many families facing difficulties, he has to remind colleagues how fragile Ireland's position still is.

"The Irish people have shown great patience and understanding of the difficulties that the government faces.

"No [leader] of the last 50 years has faced the challenges that my government faces.

"I remind our colleagues abroad internationally and in Europe that while Ireland has made good progress, solid progress, we are still in a fragile position."