German Finance Minister Wolfgang Schaeuble said on Tuesday he regretted a decision by Cyprus's parliament to reject a proposed levy on savings in banks as a condition for a European bailout.

"We regret the decision," Schaeuble told ZDF television. "Cyprus requested an aid program. For an aid program we need a calculable way for Cyprus to be able to return to the financial markets. For that, Cyprus's debts are too high."

Schaeuble added that it was a "serious situation" now in Cyprus and said the country had no one to blame for its situation other than itself. He said he doesn't think its "business model" works anymore and warned Cyprus must act quickly.

"In a situation like this, when an insolvency looms, then the creditors have to participate if they want to avoid an insolvency. If you want to avoid that, then the investors in the bank have to make a corresponding contribution. Whether that's a 'bail in' or a levy, that's for Cyprus to decide itself."

(Reporting By Erik Kirschbaum)