With businesses shrinking, the country could be dragged down into an even deeper recession, he said.
There's also concern that large depositors - including many wealthy Russians - will take their money and run once capital restrictions that Cypriot authorities have imposed on bank transactions to prevent such a possibility are lifted in about a month.
Cyprus agreed on Monday to make bank depositors with accounts over 100,000 euros contribute to the financial rescue in order to secure 10 billion euros ($12.9 billion) in loans from the eurozone and the International Monetary Fund. Cyprus needed to scrounge up 5.8 billion euros ($7.4 billion) on its own in order to clinch the larger package, and banks had remained shut for nearly two weeks until politicians hammered out a deal, opening again on Thursday.
But fearing that savers would rush to pull their money out in mass once banks reopened, Cypriot authorities imposed a raft of restrictions, including daily withdrawal limits of 300 euros ($384) for individuals and 5,000 euros for businesses - the first so-called capital controls that any country has applied in the eurozone's 14-year history.
Under the terms of the bailout deal, the country' second largest bank, Laiki - which sustained the most damaged from bad Greek debt and loans - is to be split up, with its nonperforming loans and toxic assets going into a "bad bank." The healthy side will be absorbed into the Bank of Cyprus.
On Saturday, economist Stelios Platis dismissed the rescue plan as "completely mistaken" and criticized Cyprus' euro area partners for insisting on foisting Laiki's troubles on the Bank of Cyprus.
Clerides said it appears that some euro area countries such as Germany and Finland wanted to see the end of Cyprus as an international financial services center, while others, such as eurogroup chief Jeroen Dijsselbloem, wanted to use the country as an "guinea pig" to send the message that European taxpayers would no longer shoulder the burden of bailing out problem banks.
But German Finance Minister Wolfgang Schaeuble challenged that notion, insisting in an interview with the Bild daily published Saturday that "Cyprus is and remains a special, isolated case" and doesn't point the way for future European rescue programs.