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The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

Moralitis: A cultural virus

We look at the causes, symptoms and methods of prevention and treatment of ‘moralitis’, the societal virus that is causing political correctness and identity politics.

By Robert Oulds and Dr Niall McCrae
The body politic has become infected. Like the growth of bacteria in a Petri dish, the subversive tenets of cultural Marxism have spread as a pinking of the public discourse. The loss of rationality from public discourse and reckless abandoning of evidence in favour of politically correct moralistic mantras damages the civitas.

Diversity of ideas is strangely absent from the heterogeneity celebrated by the political and cultural establishment. Alongside the widely reported increase in food intolerances, society is  suffering from ‘ideallergy’, an intolerance of other people’s ideas.

In this monograph we present our thesis of a cultural virus. This manifests in a moral hegemony that subverts conventional social norms and quashes dissent. In this delusional condition, people may seem to be acting with autonomy, but the forces of conformity are such that their freedom is limited, and their utterances merely regurgitate group-think.

The process by which this has occurred is analogous to a virus.  It is an epidemic disease so powerful that it has a cytopathic effect on society, changing the cognition and behaviour of its hosts.

We begin by considering psychological and sociological perspectives on social and political attitudes. In the second half we present our putative cultural virus of ‘moralitis’. The causes, symptoms and prognosis are described, followed by methods of prevention and treatment.

The Virtue-signalling Cycle

Type example Bruges Group John Doe
How political correctness spreads

The Authors

Type example Bruges Group John Doe
Robert Oulds, MA, FRSA
Type example Bruges Group John Doe
Niall McCrae PhD, MSc, RMN

The Euro’s Battle for Survival

Entering the Red Zone

By Bob Lyddon

In this paper, Bob Lyddon explores the various caveats and consequences of the Eurozone's survival and continuation, and discusses the UK's role in or alongside the Eurosystem post-Brexit. As an expert in international banking, Lyddon works through his own consultancy company, Lyddon Consulting Services, and has written for the Bruges Group on several occasions in the past.His areas of expertise include banking regulation, the sovereign debt crisis, and international money transfer and electronic banking.

Lyddon argues that, contrary to the indications of UK Remainers, there has been no Eurozone economic recovery, and that the attempts to prop it up will have disastrous effects if followed through.The weak performance of the Eurozone is supported by exports to China, along with a huge cushion of monetary support from the Eurosystem of central banks.There are two yet unresolved underlying problems to the Eurozone that were exposed in the 2012-13 Eurozone crisis which prevent recovery: debts owned by the Periphery banking systems, and the over-indebtedness of their governments.These issues have been cloaked by the Eurosystem's actions under two headings: the ECB's (European Central Bank) quantitative easing programme known as APP (Asset Purchase Programmes), which is now reputed to total €2 trillion and the build-up of overnight loans between the National Central Banks of the Eurozone in the TARGET2 Euro payment system.These factors are closely linked to each other, as the transaction of a typical APP purchase leads to an increase in loans through TARGET2.

However, there are several reasons why the ECB's APP stimulus program is not infinitely sustainable.For one thing, there is a movement among central banks that stimulus programs should be minimised and economies made to stand on their own feet, as with America's own version of APP.Additionally, the UK's decision to leave the EU means that remaining member states will have to pay in more money to enable existing EU programs to enable them to continue.The EU Fiscal Stability Treaty affects the APP program's sustainability, as well as the clear divide in TARGET2 between lender NCBs (National Central Banks) and borrower NCBs, the failure of debts owed in several banking systems to decrease, and the Italian elections earlier this year.

The lending since 2012 by the European Investment Bank and its offshoot, the European Fund for Strategic Investments, have fulfilled the same objectives as APP – to inject funds into the Eurozone economy.However, they have done little to create a foundation for economic growth, and are instead an example of borrow-and-spend.

One of the necessary steps down the road for the consolidation of the Eurozone is debt mutualisation.For a variety of reasons, the earliest that this can happen is 2023, and so a proposed interim plan is the creation of a new type of bond called a Sovereign Bond-Backed Security (SBBS).A Special Purpose Issuing Entity is created and it purchases government bonds of Eurozone member states, and the funding of this occurs through issuing SBBS in series:








Bonds of Eurozone member state governments that carry a long-term rating from Standard&Poors of AA- or better




Bonds of Eurozone member state governments that carry a long-term rating from Standard&Poors between A+ and BBB+, meaning they are of "investment grade"




Bonds of Eurozone member state governments that carry a long-term rating from Standard&Poors below "investment grade", meaning BBB or lower

The backing is notional rather than legal, and investors buy into the terms of a series, which is determined within a typical creditor ladder.The current plan is to issue €1.5 trillion of SBBS, which would infer that the Special Purpose Issuing Entity buys about 15% of all Eurozone member state debt currently in issue.The idea of SBBS is to solve the TARGET2 imbalances before debt mutualisation can occur, but in order to make that happen, the lender countries would have to agree to issue more debt themselves so as to meet the SBBS proportions, pay the cash proceeds to the borrower NCBs to secure their TARGET2 debts.However, if SBBS could eliminate APP, it would also greatly reduce the TARGET2 imbalances, because they are intimately interconnected.

Lyddon details and elaborates on the effects of these factors in his research, and argues that the six aforementioned factors culminate in a crisis for the Eurozone. In response, there is an ongoing programme for a "banking union," which includes stricter regulatory measures.On top of this, there has been talk of a proposal for a EU-wide Deposit Insurance Scheme which could result in German taxpayers reimbursing depositors in failed Italian banks.Another suggested response to the crisis is the creation and issue of €1.5 trillion of the so-called Sovereign Bond-Backed Securities, which is approximately the amount of the TARGET2 imbalances.

From these potential solutions originates the idea of centralisation of the Euro.Steps to make that happen have already happened and are in the works, and implicate a completed nation state with one set of taxpayers responsible for the debts of the state and subdivisions of it, backing a single lifeboat fund for depositors into any bank in that state.It would take those drastic measures to rescue and stabalise the Eurozone.

The other possible path out of the crisis, Lyddon argues, is the abandonment of this "burning platform."The UK's path to get as far away as possible from the impending explosion of the Eurosystem is rational, though the team negotiating the terms of Brexit and the transition seems not to appreciate the bind that the Eurozone is in and the extreme dangers of remaining associated with the arrangement.

The UK's exit from the EU has several notable implications on these structures.Following Brexit, the UK will cease its contributions into the "Payments Appropriation" portion of the EU budget, it will no longer be one of the guarantors for the obligations created by the EU under the "Commitments Appropriation" of the EU budget, and the UK will cease to have a risk on its capital in the ECB and EIB and will have its paid-in capital reimbursed.To set against this, no UK borrower will be able to access funds as a member state from the EIB or access funds from the EFSI at all.Consequently, EU member states will have to increase their cash contributions into the "Payments Appropriation" portion of the EU budget and will have to be willing to take more risk under the "Commitments Appropriation" of the budget.Given all the other claims on their financial resources, that is going to be a tall order for the other EU member states.

Lyddon's research ultimately concludes that the promises of the euro have not been delivered and that the consolidation and centralisation of the single currency and the EU is inevitable.The UK population voted to get off that bus, and all that remains to be seen is whether the Brexit deal will result in a prolongation of the one foot on/one foot off arrangement, or if it will be the clean break that the people asked for.

What it will look like: How leaving the EU and the Single Market can be made to work for Britain

The PM, Theresa May, must focus on eliminating tariffs and clearing the EU's burdensome barriers to trade

17th January 2017

The Bruges Group report What it Will Look Like: How leaving the EU and the Single Market can be made to work for Britain details the potential challenges the UK faces when it leaves the EU. The report also explains how these problems can be addressed by Her Majesty's Government, ahead of Theresa May's planned Brexit speech on Tuesday 17th January 2017.

Only by knowing the potential pitfalls can the Prime Minister hope to mitigate and eliminate the EU’s burdensome trade rules and bureaucracy. The UK can then take advantage of the global opportunities that await us.

Drawing upon decades of research and analysis, this report clearly explains how:

  • There is no such thing as a truly 'Hard Brexit' - but there are significant obstacles.
  • A UK-EU trade agreement, focused on tariff reduction and clearing customs, could take just 18 months to complete.
  • The UK's bargaining position is stronger than many commentators believe.

This report deals with the top ten issues of withdrawal from the EU. It explains that specific, easily reached agreements on the mechanics of trade in both goods and services will not only resolve any problems that may arise when exporting to the EU but such arrangements will also protect and enhance our trade with the EU.

Theresa May needs to address in her EU speech the solutions outlined in this report. Brexit negotiators can draw on the findings of this new Bruges Group study which sets out a bold vision for Brexit and how exiting the EU, and even the single market and the customs union, can be made to work.

Why Brexit Should Be Accompanied by Irexit (Ireland exit)

Ireland’s political Establishment is only now realising that Brexit really does mean Brexit and that the case for an accompanying Irexit is overwhelming. Irish opinion is likely to move in this direction over the coming two years and UK policy-makers should encourage that.

Dr Anthony Coughlan

22nd February 2017

For forty years from 1973 the Republic was a major recipient of EU money through the Common Agricultural Policy. Since 2014 the Republic has become a net contributor to the EU Budget. In future money from Brussels will be Irish taxpayers’ money recycled. This removes the principal basis of Irish europhilia, official and unofficial.

If Dublin seeks to remain in the EU when the UK leaves it will have to pay more to the EU budget to help compensate for the loss of Britain’s net contribution. A bonus of leaving along with the UK on the other hand is that it would enable the Republic to get its sea-fisheries back - the value of annual fish-catches by foreign boats in Irish waters being a several-times multiple of whatever money Ireland got from the EU over the years.

As regards trade and investment, the Republic sends 61% by value of its goods exports and 66% of its services exports to countries that are outside the continental EU26, mostly English-speaking. The USA is the most important market for its foreign-owned firms and the UK for its indigenous ones. Economically and psychologically it is closer to Boston than Berlin and to Britain than Germany.


The UK’s liabilities to the financial mechanisms of the European Union

The UK’s potential exposure to the EU is over £80 billion.

Bob Lyddon
16th June 2016

Independent research, commissioned by the Bruges Group from acknowledged expert in this field Bob Lyddon, shows that the true extent of the UK’s potential exposure to the European Investment Bank (EIB), European Central Bank (ECB) and EFSM (European Financial Stabilisation Mechanism) is over £80 billion. If the crisis in the Eurozone continues this already high figure could increase massively.

The UK carries huge financial liabilities as an EU Member State, liabilities that could translate into calls for cash far higher than our annual Member cash contribution. These are created through various funds and facilities of the EU itself, and through shareholdings in the European Investment Bank and the European Central Bank. Each of these bodies engages in financial dealings on a large scale, with the Member States acting as guarantors for sums borrowed. The main recipients of funds are the Eurozone periphery states: Italy, Spain, Greece, Portugal and Ireland.

The UK, being one of the largest and most creditworthy of the Member States, is looked at as one of the guarantors most able to stump up extra cash as and when demanded, demanded, that is, by a Qualified Majority of Member States with no unilateral right of refusal. Such calls can be expected if another crisis blows up in the Eurozone.

The UK’s leaving the EU would relieve us of these considerable risks and liabilities. This independent research shows that Britain should leave the European Union.

Jim Mellon, billionaire investor and well known specialist in sovereign risk, described this research as,
“An excellent, incisive and important work. The European Union is a millstone and we have a once in a life time opportunity to be free of it.”

Losses would be claimed by the EU institutions and added to the UK PSBR and therefore to the national debt, except that our current paid-in capital in EIB (€3.5 bn) and the ECB (€0.1 bn) have already been paid in and are already part of the UK's national debt.

Event UK cost in £ Cost per household
UK loses its capital in the European Investment
Bank and the ECB
32,560,000,000 £1,185
Loses through the European Financial
Stabilisation Mechanism
48,000,000,000 £1,747
TOTAL 80,560,000,000 £2,932

Number of UK households = 27,468,000

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