An urban myth. Ireland was losing ships to the U Boats so I don't think the Kreigsmarine would have been very welcome.
A story regarding a brawl in a bar in Angra, the capital of Terceira Ialsnd in the Azores isn't a myth however. The Azores are Portuguese and tehnically Portugal was neutral in WW2, for the first couple of years at least. However, the British put pressure on them based on a 600 year old treaty and the Portugese allowed the RAF to establish an airbase at Lajes where anti submarine aircraft operated. Germans were still putting into the Azores for supplies, and one night, a group of RAF crew on a night out came across some Germans in a bar and a punch up ensued. The story has it that it was a U Boat crew, but as the U Boats didn't dock away from base, it was more likely to be a supply ship. The Germans were for a while resupplying the U Boats off the Azores and there is a large rock off the south coast of Terceira with a large split, which (as the story says) the Germans used to use as cover for the resupply operation.