PARIS, France (PNN) - March 28, 2013 - Cyprus is sacrificing too much for its European bailout, which is destroying the foundations of the island's economy, its foreign minister told a French newspaper.

"Europe is pretending to help us but the price is too high: nothing less than the brutal destruction of our economic model," Ioannis Kasoulides told Thursday's edition of financial daily Les Echos.

The euro zone agreed to a 10 billion euro rescue package on Monday following tough negotiations. It is the first to impose losses on bank depositors, and one that looks set to push the island deeper into an economic slump, shrink the banking sector, and cost thousands of jobs.

The banks reopen on Thursday after being closed for almost two weeks, with tight controls imposed on transactions to prevent a run on deposits.

Under the terms of the rescue, the second-largest bank, Cyprus Popular, is being closed, with heavy losses inflicted on big depositors.

Kasoulides also blamed the European Central Bank, saying that lending to Cyprus Popular, also known as Laiki, should have been stopped before it was on the verge of bankruptcy.

Without a bailout deal, Cyprus had faced certain banking collapse and risked becoming the first country to be pushed out of the European single currency.

Cyprus has about 68 billion euros in its banks - a vastly outsized financial system compared to its economy and population that attracted deposits from foreigners as an offshore haven.

Deposits above 100,000 euros in the two biggest banks, which are not guaranteed by the state under EU law, will be frozen and used to resolve Laiki's debts and recapitalize the Bank of Cyprus, the island's biggest bank.