Recent reports have highlighted an even more disturbing question for Britain than the £4.4 billion bailout contribution to save a bankrupt Portugal’s membership of the euro currency union.

This new danger is that the European Central Bank (ecb), created by the Maastricht Treaty and charged with the monetary policy of the eurozone’s 17 member states, may itself be bankrupt!

In its desperate struggle to save the eurozone, the ecb has frantically been buying up enormous quantities of government and bank debt (what it calls “market operations”) from the most profligate and indebted eurozone countries. If it had not done so, Ireland, Greece and Portugal would have gone bust months ago.

Last week, a shocking analysis from JP Morgan showed that the ecb is exposed to a massive €200 billion (us$288 billion) of Greek debt. It is now facing losses of around €40 billion on these Greek investments. Other commentators denounce this as a gross underestimation.

The jpm analysis concerned only Greece. If, as is likely, the ecb is facing similar losses on its holdings of Irish, Portuguese and Spanish debt, the complete picture is truly horrifying.

The trouble is that the ecb refuses to confess these losses showing its debt holdings at “book value,” or the value it paid for them.

Commenting on the JP Morgan piece, Telegraph political editor Peter Oborne wrote last Thursday that with these levels of losses, if it were a normal bank, the ecb would now be classed as bankrupt. Of course, in keeping with other EU institutions, the ecb is obsessively secretive, refusing, like its parent the European Commission, to open its accounts to any public scrutiny.

With this in mind, think tank Open Europe has asked the unthinkable: Has the ecb become a “bad bank”?

Peter Oborne says the answer is yes: “In the shabbiness of its accounting standards and the worthlessness of its investments, Jean-Claude Trichet’s ecb bears comparison to Lehman Brothers or the Royal Bank of Scotland” (op. cit.).

The great danger for Britain is that, as a member of the European Union’s bailout mechanism, it will almost certainly be asked to stump up many more billions when the ecb is forced to fess up and demand more money from member states.

Oborne comments, “[T]he disaster will hit us too. Britain is a shareholder in the ecb and Britain is a core part of the bailout mechanism. George Osbourne as chancellor has an urgent duty to protect Britain from the catastrophe that now looms over Europe” (ibid.; emphasis mine throughout).

Britain is sleepwalking into this disaster!

With the exception of a few astute commentators like Oborne, the press is largely silent on the danger of an ecb collapse. Incredibly, right in the midst of this mess, Britain’s leading financial paper recently called for Britain to join the euro!

On Britain’s slumbering press, Oborne wrote: “This problem is exacerbated by the fact that almost all leading financial journalists share the moral and emotional commitment the European political class has long felt for the euro. The Financial Times, for example, has been a passionate supporter of the single currency since its inception, a pathology which runs so deep that its chief political columnist recently dedicated a column to making the extraordinary argument that the British economy would have been better off if we had joined the euro when it was first introduced” (ibid., February 14).

The root of the problem, writes Oborne, is the journalists’ failure to study history. If they did, they would see that Portugal, Greece and Spain renege on their debts as an automatic response to financial crises, whereas the Anglo-Saxon countries rarely, if ever, default (Britain—no defaults in 1,000 years). Most European countries, he wrote, are “culturally attuned” to bankruptcy.

As for British politicians, Oborne observes that they are in utter denial about the enormity of the crisis in Europe. Writing of his firsthand experience of this complacency, he says (op. cit.):

Recently, I asked a well-placed minister what plans had been put in place in case the eurozone started to unravel. He just looked at me blankly: “That’s not going to happen. There is too much political will behind the euro for them to let it go.” In other words, the Cameron government shares the same complacent analysis as the European political class: This is not a real problem, we’ll muddle through somehow, it’s all the fault of the speculators, etc. etc.This is denial. The simple truth is that Greece, Ireland and Portugal are all bankrupt. Perhaps it is worth spelling out exactly what this means: However hard these countries try, and whatever austerities they impose, they will never, ever be able to pay off their debts.

As the looming ecb disaster stalks Britain, those among Britain’s journalists and political class who should be warning of impending catastrophe are asleep!

The Bible speaks of a time when Britain’s watchmen, including the press and the politicians, would refuse to warn: “His watchmen are blind: they are all ignorant, they are all dumb dogs, they cannot bark; sleeping, lying down, loving to slumber” (Isaiah 56:10).

But not this publication! We will continue to warn you of the snare which Britain’s ecb and EU entanglement represents! (Ezekiel 12:13).

To read more of Britain’s impending fate at the hands of the ecb/EU and of the great hope that lies just beyond, request your free copy of Winston Churchill—The Watchman.