* Germany says insolvency possible in theory
* Bailouts won't be approved against Germany's will
* Germany wary of euro becoming "transfer" union
(Adds quotes, detail)
By Gernot Heller
BERLIN, Dec 1 (Reuters) - Germany said on Wednesday a euro zone nation can "in principle" become insolvent, but reassured its own taxpayers they would not end up footing the bill for any rescue package against the will of the German people.
With the crisis in the 16-nation currency bloc deeping after the Irish bailout on fears that euro-zone member states might be forced to default on their debt, German Economy Minister Rainer Bruederle said Portugal and Spain were not going to need help.
But he did allow for the possibility that a euro-zone member nation could default in theory and addressed wariness in Germany about having to bail out more of its euro zone partners.
Such rescue deals required unanimity and could not be pushed through "against the will of Germany", he said.
"Our taxpayers won't go along with everything," said the minister, referring to the feeling in Germany that it has become the "paymaster" of its struggling partners, first with the Greek bailout and euro zone rescue mechanism, and then with Ireland.
Bruederle also stressed any tool for assisting debt-ridden euro-zone economies "must not become transfer mechanisms", but should just buy time for economic problems to be corrected.
The minister emphasized that without close cooperation between Germany and France, who have forced some of their ideas on the design of future euro-zone crisis measures upon their EU partners, "not much would get achieved" in Europe.
"RESCUE OUR MONEY"
German Chancellor Angela Merkel has faced criticism among European policymakers for driving up euro zone debt costs, and even prompting the Irish crisis, with her insistence on private investors sharing in the risk of future euro zone debt crises.
She roiled currency and bond markets last week by stressing the "exceptionally serious" plight of the euro and saying a new euro zone rescue mechanism taking effect from mid-2013 should involve banks and investors facing potential losses too.
Bruederle was speaking as a guest at the launch of a book by a former head of the Germany industry federation BDI, Hans-Olaf Henkel, titled "Rescue Our Money". One of Henkel's proposals is to split the euro zone in two, with northern Europe in one camp and southern euro countries like Spain and Italy in another.
This would "reflect the differences in mentality between different countries", said Henkel.
The centre-right German government has repeatedly reaffirmed its commitment to the euro while insisting that those receiving aid adhere to strict conditions, including deep spending cuts.
German public support for solidarity with the likes of Greece and Ireland is precarious: in an opinion poll for Focus magazine, 48 percent were in favour and 47 percent against.
Some statements on the crisis by German leaders are aimed at addressing potential concerns about the bailouts raised by Germany's constitutional court, which has rulings pending on the Greek and broader euro rescue packages agreed in May.
Its rulings are expected next year and if they ruled the bailouts unconstitutional, Germany would be blocked from participating, pushing the euro zone deeper into crisis.
Merkel also faces half a dozen difficult state elections next year, having already lost control of North Rhine-Westphalia state this year partly because of the unpopular Greek bailout. (Additional reporting by Paul Carrel; writing by Stephen Brown; Editing by Ron Askew)