"In the past the dividing line within the liberal family has tended to be whether you were an economic liberal or social liberal. That is no longer the major dividing line,” said Watson.
“The major dividing line today is over how fast you want to build Europe.”
Two liberals have already informally thrown their hat in the ring for the Commission presidency, ALDE group leader Guy Verhofstadt and the European commissioner in charge of economic and monetary affairs, Olli Rehn.
The call for nomination will formally open at the end of the Congress on Saturday (30 November) and will last until 20 December.
“The main difference between them is that one appeals more to those who want a more rapid federalist approach and the other one to a more gradualist approach,” Watson said. “It will be interesting to know which way it goes.”
The Dutch liberal politician and former EU commissioner, Frits Bolkestein, launched a scathing attack this month against Verhofstadt, highlighting tensions within the liberal family ahead of next year's EU elections.
Verhofstadt and his fellow European federalist supporters are a greater danger to the European Union than eurosceptics, Bolkestein said in a recent interview.
Asked about prospects for Liberals at the upcoming European elections in May 2014, after the debacle of the FDP in Germany’s general elections, Watson said he was less worried than before.
“The FDP ran a particularly bad campaign, at the end of a long period of decline within the party. Of course I regret the results, but if we look at Norway, Luxembourg – where we are about to get the fourth prime minister- the Czech Republic, it’s not a clear pattern [of decline],” he explained.
“Six months ago, I was quite pessimistic about the size of the liberal group in the next European Parliament. I am no longer quite pessimistic. I think we’re better organized in many countries than we have been before,” Watson argued.
The Liberals have often played the role of kingmakers in the European Parliament, especially in recent legislatures. But political analysts say the possible rise of eurosceptics in the House could alter the power balance which has so far allowed the liberals to maintain their strong position.
“I think it would be hard to imagine a parliament in which more than 20% of the members come from extremist or populist parties,” Watson said, conceding however that it would change the way coalitions form in the assembly.
He said that to pass legislation today “you need 62% of the entire members for co-decision, what it actually means is 70% of present members”, adding: “To get 70% it’s a three party coalition-EPP, S&D and Liberals”.
Asked whether the manifesto for the European elections will mirror the one launched in 2009, he said it would be more hard-nosed.
“In 2009, we still lived in the mind-set of prosperity, we were not aware of how long and deep the recession would be. We can now see that it will take us ten years to recover,” he said. “We live in a much tougher world and the only way that we know to improve our economy is through trade.”
Watson insisted that the EU can recover only through strengthening the single market and using trade as a driver of economic growth and that will be strongly underscored in the manifesto, which the candidate will have to support and campaign on.
To read the full interview, click here.