Anxious and reactive on walks, self-titled "guard dog" please help!

I have a 2-3 year old petit brabancon griffon named Picasso who is just a complete nerve-wreck. He'll bark at ANY sound that comes from outside, anything he thought he heard, anything he thought he saw he'll bark at. He barks at my family entering or leaving the house (our door is codelocked and makes a sound when it's closed/opened) and he ESPECIALLY hates strangers and other dogs. He'll bark and bark and bark non-stop at anyone who dares step a-foot in his lair, whether it's outside or inside, he absolutely hates people passing our house.

BUT that's not what I wanted to tackle. You see, he's terrified of other people abd places. When I walk him somewhere that isn't our home area, he freaks out, becomes paralyzed almost. He pulls the leash, his tail goes between his legs and he doesn't even notice that I'm there anymore! That's why it's so difficult to train this off of him because he doesn't listen to commands and doesn't even take treats. He just looks around anxiously, like something is about to attack him.

He isn't an aggressive dog, he has never bit anyone and wouldn't hurt a fly, but sometimes he just feels the need to "guard" his house, so he barks at anyone crossing our path (he's extremely loud for such a little dog) but he doesn't dare walk up to them. If someone tries to come near him he pulls backwards and slips OUT of the harness! (No matter what harness, he's slippery) One time a pair of cyclists went by and he was so scared he tried to climb a 4 feet stone wall (and he almost made it) I don't know what to do, I don't want him to live like this forever and it get's pretty tirering to be honest. I KNOW I can help him, I just don't know how.

NOTE: he's a fast and good learner, but he gets eaily distracted

This is him:

This might help you:

The Reactive Dog - Movement

Reactive dogs are very alert and reactive to either sound or movement.
A sound reactive dog will react to different things according to their sensitivity and this is dealt with on an individual basis.
A movement reactive dog will react to bikes, cars, joggers, football matches etc when outside and fast people, televisions and the like indoors. Typically they either chase the stimulus or, if on lead, rear up and attempt to chase whilst often barking at the same time, in frustration, that they can’t chase. Keep the dog on the inside of you nearest to a wall and not roadside. Try to make sure you walk with the traffic coming towards you at first so that you can see the on coming vehicles/bikes etc.

When living with a movement reactive dog, everything must slow down. In the house, everything must become calm, no running children, no quick and sudden dashes to the front door or telephone etc.
When outside, keep the dog on the lead until you have a 100% recall and a 100% instant down. Both of these can be employed in different situations. If you are quick enough to spot a potential problem, you can recall the dog to you. If the problem starts before you spot it, you can down the dog in mid flight.

However, in the first instance (and for car chasers), whilst on lead, teach the dog to sit and be calm as the stimulus approaches. Calmness is praised verbally and treats can be given, if you wish. Sometimes just a verbal praise is better and a jackpot treat given at the end of an encounter. Too many treats can teach a dog to behave badly in order to gain a treat when good!
If the dog rears up, give a firm ‘No’ command and tell the dog to Sit again. Insist on this Sit no matter what.
If the dog is barking, say ‘No, be quiet’ and then re-command the Sit. The instant the dog is quietly sitting, reward.

This will always be the way to deal with a car chaser. In no circumstances let the dog off lead on a road! Progress to walking on a couple of steps, before sitting the dog and praising the calmness. As soon as the reaction starts, get the Sit. Eventually you will be able to continue walking and praising along a road. Where possible, start this on quiet roads and build up to more busy ones.

For reactors to other things that you may encounter on a walk: Practise the recall and Instant Down every time you go out. Follow the instructions at classes and on the associated leaflet, in order to get these really solid. Outside, try to practise in calm quiet environments, initially, and gradually increase the amount of stimulating movement.

When you are confident of these exercises on lead in a busy place, then go back to the quiet place and take your lead off! (Not along a road). Start building up again as before. If at any point you have a disaster and the dog gets to the stimulus, then put the lead back on and go back a stage or two.

This does take time, but in the long run you will have a dog who behaves well or, who will at least stop or return to you, despite its instinct to leg it!

Training is the only way you will get this dog to be calmer on walks and at the door. He's not going to learn it on his own.

Start the training in the house or garden when things are calm. The Sit and the Down are important. Also the Look At Me because that gets his focus on to you and you can stop any fixation on barking or guarding before it goes too far.

And it's really important for you to be calm when you're with the dog. Any tension in you will go straight down the lead to him and make him worse.

It's going to take time and patience to make your dog less anxious. There is no quick fix. But it will be worth it because there is nothing better than a happy dog.

Watch Me!
Goal: To get your dog to pay attention! Eye contact is key!
Step 1: Prepare some treats – you’re going to need a lot to start with. Something soft and smelly usually works best! Or use some of your dog’s daily ration so she doesn’t get porky!
Step 2: Have the dog in a sit by your side. Hold the treat on your dog’s nose and get them interested in it, then move the treat upwards away from your dog towards your body up towards your face – you don’t have to go all the way up.
Step 3: When your dog makes eye contact with you – immediately say “Watch” Praise and give the treat. Repeat....often!
Tips: Try and keep the treats out of sight or your dog may spend more time focusing on where the treat came from and not where it is going! Reward should be instant to start with and then longer in coming so your dog starts to watch you for longer periods of time.
Once your dog gets good at this command, start using the treats less as a lure and more as a reward. Do not move the treat and just use the command. When your dog looks in your eyes cause she understands what you are asking – praise and treat.

LIVER CAKE RECIPE
8ozs Liver [preferably Lambs]
4ozs S/R Flour
2 Eggs
2 Cloves Garlic/ or 2 tsps garlic puree.

Put all the ingredients into a blender until the mixture is smooth, pink and runny, not too rigid a requirement if you prefer to make it a bit chunky' Pour into greased swiss roll type baking tin and place in the oven [Gas Mark 4] for around 30-40 minutes. It can be baked for longer to make crispier but watch that it doesn’t burn. Leave to cool and cut into small bite size pieces. Freezes very well and defrosts quickly for use.
You can substitute the liver for mince or other meat/poultry/cheese/sardines.

Hopefully the two things will help you.