The Cypriot government must now explain to its people why the bailout deal clinched in the early morning hours of Monday in Brussels is the right path for the country, a German government spokesman said.

"It's clear that the agreement we reached needs to be explained in Europe," Steffen Seibert, spokesman for Chancellor Angela Merkel told a news conference.

"We are doing our part in Germany. But also in Cyprus, the Cypriot government has a significant responsibility to explain to its people why this path is difficult but right."

(Reporting by Noah Barkin and Gareth Jones)