Euro zone wants Cyprus, but it must act rationally: Nowotny

Keeping Cyprus in the euro zone is in the currency bloc's interests, European Central Bank Governing Council member Ewald Nowotny said on Tuesday, but he suggested the island needed to show discipline in its reaction to its euro zone bailout.

He spoke after Cyprus's parliament rejected a proposed levy on bank deposits as a condition for a European bailout, throwing euro zone efforts to rescue the latest casualty of the currency area's debt crisis into disarray.

"It is in the interests of the euro zone, and of course the interests of all members states, (for Cyprus) to stay in. But you also have to say that membership in the euro zone demands a kind of discipline and the readiness to act rationally," he told Austrian broadcaster ORF in a television interview.

Nowotny said he could rule out other struggling euro zone states being asked to adopt similar taxes on deposits, noting Cyprus's outsized financial sector made it a special case.

(Reporting by Michael Shields)