"I think patience with Cyprus was running out also on other issues, such as its intransigence over the (Turkish) north and its history of encouraging tax evasion," said Josef Janning, a political scientist at the German Council on Foreign Relations, an independent think tank in Berlin.
Cyprus has refused to budge in long-running negotiations to find a political solution for the breakaway Turkish north of the island, which Nicosia refuses to recognize.
Germany's Frankfurter Allgemeine Zeitung newspaper, a conservative paper widely read in government and business circles, accused Cyprus on Thursday of trying to blackmail the European Union and warned that if it succeeded, other countries such as Greece, Portugal, Spain, Italy and Ireland might follow suit.
"If this strategy of blackmail in Cyprus works then there would indeed be a domino effect," the paper said in an op-ed. "The basis of the entire rescue policy, which can be summed up in the idea that solidarity entails (economic) solidity, would lose credibility."
In Spain, Prime Minister Mariano Rajoy didn't mention Merkel or Germany but criticized the plan for Cyprus in comments to reporters, saying he was "opposed to people losing their savings, because they are not in any way responsible in this matter."
Experts said Spanish politicians are nervous about the impact of the Cyprus deal, but not in panic mode at this point.
"Due to the numerous economic differences between the two countries, we have not yet seen serious spillovers in Spain due to this deal. However, the fear is that this deal could lead to an overall loss of confidence in Spanish banks, which in turn could lead to future political problems," said Morten Olsen, an economics professor at the IESE Business School in Madrid.
Germany's Foreign Minister warned Friday that Cyprus was revealing Europe's inability to make decisions.
"We all need to work hard to overcome this challenge," he told ARD public television, before insisting, once again, that German money comes with strings attached. "We are ready to show solidarity but in return those countries that are asking for solidarity need to be prepared to do their homework. If that doesn't happen, then it (solidarity) can't be granted. "
AP writers Alan Clendenning and Ciaran Giles contributed to this story from Madrid.
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