On Dennis Miller’s radio show on Tuesday, Washington Post columnist Charles Krauthammer warned that while the Cyprus bailout may appear to involve a “trivial” amount of money, it could set the stage for wide-reaching consequences.
Krauthammer compared the Cyprus situation to the 1914 assassination of Austrian Archduke Franz Ferdinand, which began the dramatic spiral towards World War I. (RELATED VIDEO — Greg Gutfeld: Gun rights prevent Cyprus-like bailout from happening in the US)
“The first thing that strikes me is how tiny this whole thing is,” Krauthammer said. “I mean, it could have ripple effects the way, you know, Sarajevo did in 1914. Little things can develop into big things. But the bailout is $13 billion. I think I read the other day that Apple has about $50 [billion] cash on hand. … That means Apple could take a quarter of its current holdings, purchase the island and turn it into, you know, a Silicon campus. So the sums here — from an American perspective, from a European perspective — are huge. It’s sort of hugely disproportionate from anything you’d expect. So it’s a very easily soluble problem.”
“What’s surprising is how the European Union decided to get really tough, because this is a relatively trivial amount of money,” he continued. “And they decided the bailouts are really getting out of hand. From now on they’re going to make people really pay, and they mean they’re going to make the governments pay and they’re going to make the depositors pay, which is a way to get the money. But in the end I think it could very easily cause a panic for anybody holding money in a Spanish or an Italian bank. And that’s where if there is going to be a contagion, it’s going to be Spanish or Italian.”
Krauthammer said panic might then strike other parts of the globe.
“[I]t seems to me that if any of those countries experience some kind of panic, it will get really bad, really fast,” he added.