The world economy has become less Adam Smith, more Cincinnati Kid - Watson

5.03.00pm BST (GMT +0100) Wed 8th Oct 2008

As the European Parliament prepares the European Council to be held in Brussels on 15 and 16 October, the debate with the French Presidency and the European Commission was dominated by the concerns about the financial crisis which will also be at the core of the summit.

In his speech, local Westcountry MEP Graham Watson, stated: "What we have witnessed is not the failure of the market economy. Rather, it is the excesses of unfettered, ineffectively-regulated markets. The greed of individual bankers, traders and short-sellers is certainly to blame but so too is the failure of governments to ensure transparency and honesty in their dealings. The world economy has become less Adam Smith, more Cincinnati Kid."

In a view to the summit, Watson said: "Europe needs coordinated and consistent policies to stem the flow of financial losses, and establish the transparency and good practice needed to prevent future woes. It is at moments like this that our Union is defined. We expect from Europe's Leaders a collective response".

Watson concretised: "We must now consider the case for a pan-European Financial Services Authority to maintain order and transparency within and between financial institutions. And the European Council should also ask whether the EU budget might be used to allow the European Investment Bank and the EU Investment Fund to give credit guarantees for small businesses."