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Cyprus Rescue Not Applicable to Other Countries

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Europe's rescue of Cyprus, partly funded by bank deposits, is not applicable to other euro zone countries, according to an economy ministry source in Spain, whose own financial sector needed European aid last year.

"Cyprus's situation and this agreement cannot be extrapolated to any other country in the euro zone," the source said on Saturday.

"It's a positive deal because it resolves the problem of Cyprus and at the same time gives a clear message about the stability and sustainability of the euro."

The euro zone struck a deal on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risks of a wider run on savings.

The eastern Mediterranean island becomes the fifth country after Greece, Ireland, Portugal and Spain to turn to the euro zone for financial help during the region's debt crisis.

Euro zone finance ministers forced Cyprus' savers to pay up to 10 percent of their deposits to raise almost 6 billion euros as part of the rescue.

Europe bailed out Spain's weakest banks last year to the tune of 40 billion euros to prop up a financial system badly damaged by a 2008 housing and construction crash.

Spain's banking sector has undergone a massive clean up since then, transferring over 50 billion euros of toxic real estate assets to a so-called 'bad bank' set up as a condition of the rescue.

But Spain's gross domestic product sank for the sixth straight quarter at the end of last year and at its fastest rate since 2009.

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