I think Paul Krugman puts it better than I did ...
"Shorter Cyprus
"So, a quick summary: The Germans don’t want a Cyprus collapse / exit from the euro, but they also don’t want the spectacle of German taxpayers bailing out Russian money-launderers. So what they did instead was blackmail Cyprus into having Cypriot depositors bail out Russian money-launderers. That way Germany’s hands are clean."
