EU crumbling: Eurozone damaged by ECB's 'coup d'etat' - and Britain could pay the price

ECB: Expert on German ruling of public sector programme

And author Bob Lyddon has said the Pandemic Emergency Purchase Programme (PEPP), which is separate from the EU’s £677million coronavirus recovery fund, operates in such a way, by ruthlessly driving out speculators and private investors, that it represents the epitome of the failure of the entire euro project. The PEPP, launched in March of last year, aims to protect the financial system of the monetary union - and by extension, of the EU itself.

The ECB has, through the PEPP, carried out a coup d’etat

Bob Lyddon

But Mr Lyddon, founder of Lyddon Consulting Services Ltd, said the end result has been to concentrate more than 50 percent of public sector debt into the hands of Eurozone financial mechanisms.

Mr Lyddon’s paper is entitled: “The ECB’s Pandemic Emergency Purchase Programme: the undermining of the Eurozone as a free financial market, the epitome of the failure of the Euro project, and a coup d’état by the European Central Bank.”

In it, he highlights the efforts of a group of German academics and lawyers to rein in the ECB’s pre-existing Purchase Programme for public sector securities in a case heard by the German Constitutional Court last year.

He said: “The ECB has, through the PEPP, carried out a coup d’etat.

Ursula von der Leyen

The PEPP is a "coup" against Ursula von der Leyen's EU, suggested Mr Lyddon (Image: GETTY)

Christine Lagarde

Christine Lagarde, President of the European Central Bank (Image: GETTY)

“The thing is completely out of control. So what has actually happened during 2020 is that this fund has bought bonds directly of Italy, Spain, and Portugal.

“It looks as if it swallows entire bond issues whole, which is exactly what the German Constitutional Court said the ECB wasn't allowed to do.

Now, the people who brought the court case last year have brought a new court case.

“And I'm in touch with one of the main people involved in the case. I have provided the paper to him because it lists exactly the ways in which the ECB has laughed in the face of the German Constitutional Court.”

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Michel Barnier

Britain has "accepted the narrative" of EU Brexit negotiator Michel Barnier, said Mr Lyddon (Image: GETTY)

He added: “They have circumvented all these controls, and perhaps one of the most ridiculous ones, laughable actually, is when the Constitutional Court said the bonds had to have a credit rating to ensure that the issuer of the bond can get money out of the public bond market: well there isn't a public bond market anymore because the ECB has bought it all!”

Ultimately, Mr Lyddon warned, it would be the people of Europe who would suffer.

He explained: “They’ll end up with a financial market which is entirely self-serving.

“So you'll have public sector borrowers borrowing from other public sector borrowers, paying no interest.

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Boris Johnson

Bob Lyddon also warned Boris Johnson the UK was not immune from the fallout (Image: GETTY)

City of London

City of London: One of the world's foremost financial centres (Image: GETTY)

“So interest will be nought, and actually what will happen is that anybody who's got money, who's got a pension plan, or is any kind of investor is going to suffer, because they're going to get a zero return for decades.”

Mr Lyddon also stressed the UK was not insulated from any potential fallout either.

He said: “One thing for sure is that we don't want to suffer contagion risk. We've got to put up much stronger barriers between ourselves and all of this, to protect ourselves.

"For example, what Euro-denominated bonds does the Bank of England own now?

EU budget factions mapped

EU budget factions mapped (Image: Express)

"And what bonds from this disaster does the Bank of England accept as collateral for lending to UK banks?"

Mr Lyddon added: "So we need to put up greater defence barriers, and this whole idea about the future deal which is being discussed, this Financial Services/Brexit deal, it’s all based on the wrong premise.

"It's based on the premise that London must have, and wants to have, full access to a massive and lucrative market in the EU. That's the Barnier narrative and we've accepted that narrative wrongly.

"The real narrative is how much of the money that the EU needs is raised through London, through our market - the answer is one hell of a lot.

European Central Bank

The European Central Bank is in Frankfurt (Image: GETTY)

“So the real issue is what protection should we have? Should we be allowing banks here to be the main market makers in these debased bonds? What risk does that entail to our country and to our taxpayers?”

Robert Oulds, director of the Bruges Group, told "The EU institutions are dogmatic, they will stop at nothing to avoid both democratic control and free enterprise.

“Brussels and Frankfurt are moving away from a properly functioning market economy. Despite the EU’s absurd solutions we are still allowing them dictate the terms of trade, and giving the EU the final say into whether UK-based institutions can do business in the EU or not. 

“The real issue is the potential for collateral damage to the UK from contagion coming from the EU. We need to be prepared for a long fight against the EU, and its time we took the gloves off."

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