Cameron, Clegg open new coalition era for Britain

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New Prime Minister David Cameron's Conservatives and the smaller Liberal Democrat party led by Nick Clegg struck an agreement early today (12 May) to form Britain's first coalition government since 1945. Clegg is leading the Liberal Democrats back into government for the first time in 70 years.

The agreement between the two parties, reached five days after an inconclusive election, ends 13 years of rule by the centre-left Labour Party under Tony Blair and his successor Gordon Brown.

The untested partnership will have to clean up public finances, with a record budget deficit running at more than 11% of national output.

Markets welcomed the agreement, hopeful that a government led by the centre-right Conservatives will take swift action to bring down spending.

No illusions

"This is going to be hard and difficult work. A coalition will throw up all sorts of challenges. But I believe together we can provide that strong and stable government that our country needs," Cameron said in his first speech as prime minister.

The Liberal Democrats were also celebrating after decades spent in the shadow of Labour and the Conservatives.

"There will of course be problems, there will of course be glitches. But I will always do my best to prove new politics isn't just possible, it is also better," Liberal Democrat leader Nick Clegg, who will be deputy prime minister, told reporters.

His party put its final seal of approval on the deal at a meeting that ended after midnight on Tuesday.

43-year-old Cameron took over as prime minister just hours earlier, when Brown admitted defeat in his own efforts to broker a deal with the Liberal Democrats.

He is Britain's youngest prime minister since 1812, and a few months younger than Tony Blair was when he stormed to power in 1997.

Tories had been torn apart by wrangling over Europe after the resignation of its long-serving Prime Minister Margaret Thatcher. A move to the right had failed to enthuse voters.

Cameron, a fresh-faced former public relations executive, broke with the Conservatives' image as the "nasty party," moving it toward the centre, stressing its commitment to defending the state-run National Health Service and giving it a pro-environment makeover.

Clegg and Cameron have much in common. They are the same age. Cameron is the Eton-educated son of a stockbroker, Clegg the privately educated son of a banker. Cameron was at university in Oxford, Clegg at Cambridge.

Clegg has enjoyed a rapid rise since entering British politics in 2005, becoming party leader two years later.

Born to a Dutch mother and half-Russian father, and married to a Spanish lawyer, he is the most pro-European Union of the main party leaders and speaks five languages.

Clegg was an adviser at the European Commission before becoming a member of the European Parliament from 1999 to 2004.

The Liberal Democrats have more in common with Labour in policy terms, but talks to form what the media called a "coalition of losers" swiftly fell apart.

The Conservatives are the largest party in parliament after last week's election but fell 20 seats short of an outright majority. Combined with the Liberal Democrats, they will have a majority of 76 seats.

Osborne to be finance chief

The prime minister's office announced late on Tuesday there would be five Liberal Democrats in cabinet in total, including Clegg.

It did not name the other four ministers but there were reports Vince Cable, the highly regarded Liberal Democrat Treasury spokesman, would be given a role overseeing banking and business.

A Conservative source said the two parties had agreed to significantly accelerate deficit reduction plans. The focus would be more on cutting public spending than on raising taxes.

Another Conservative source said George Osborne, a close friend and ally of Cameron, would become the new Chancellor of the Exchequer (finance minister).

Some in the finance industry have expressed doubts about Osborne because he is untested and takes over an economy emerging from the worst recession since World War Two.

William Hague, a former Conservative leader and one of the main negotiators with the Liberal Democrats, will be foreign minister.

Emotional farewell

Gordon Brown gave an emotional farewell speech flanked by his wife, Sarah, and with his children close by.

He said that it had been his fault – and his fault alone – that the Labour Party had not won a majority but that it had been "a privilege to serve".

Brown, who held hands with his two boys, Jon, 6 and Fraser, 3, said as he left No. 10 that this had been the "second most cherished job" of his life and that "husband and father" was first.

He shocked his party by saying that he would immediately leave parliament as well as the prime ministership, catapulting his deputy, Harriet Harman, into the caretaker leader's role.

(EURACTIV with Reuters.)

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"On behalf of the European Commission, I would like to offer you my warmest congratulations on your election as prime minister of the United Kingdom," European Commission President José Manuel Barroso told David Cameron in a statement.

"I wish you and your government every success in the demanding work ahead. Like all European governments, you face difficult choices in difficult times. I am confident that you will chart the right course to steer the United Kingdom out of the current crisis and back on the path of sustainable growth," he said.

"Many of the challenges ahead – delivering economic recovery, fighting global poverty, tackling climate change [and] ensuring energy security - are common across the European Union and require a common response. I look forward to working closely with you on these and other issues, such as boosting the internal market and promoting smarter regulation, more transparency and greater accountability in the European Union," he added.

"I also look forward to welcoming you to Brussels in the near future," Barroso concluded.

European Parliament President Jerzy Buzek wrote to Cameron to congratulate him on his appointment.

"I congratulate you most sincerely on your appointment, following last week's general election, as prime minister of the United Kingdom," Buzek said.

"I can speak on behalf of the whole of the European Parliament in saying how much we look forward to working with you and the new British government on the whole range of difficult challenges and choices which face the European Union today. As a former prime minister of Poland, I know very well the huge responsibility which you are now undertaking as head of government. I wish you well in the demanding work ahead," he said.

"I look forward to an early opportunity for us to discuss EU issues together, either when you are in Brussels, perhaps for a European Council meeting, or when I visit London, as I hope to do later in the year," he concluded.

US President Barack Obama called Cameron within minutes of his appointment. He reiterated his personal and deep commitment to the special relationship between the two countries and invited the new PM to visit the United States in July.

"I was pleased to call David Cameron to extend my personal congratulations for the successful campaign that he ran and for becoming the new British prime minister.

"As I told the prime minister, the United States has no closer friend and ally than the United Kingdom, and I reiterated my deep and personal commitment to the special relationship between our two countries - a bond that has endured for generations and across party lines, and that is essential to the security and prosperity of our two countries, and the world.

"I look forward to meeting with the prime minister at the G8/G20 meetings in June, and Michelle and I invited Prime Minister Cameron and his wife Samantha to visit Washington this summer.

"I also send my best wishes to Gordon Brown, and thank him for his friendship and his distinguished service as prime minister. He provided strong leadership during challenging times, and I have been grateful for his partnership. 

"This historic election has been closely followed by the American people, and I have no doubt that the ties between our two countries will continue to thrive in the years to come," Obama said.  

French President Nicolas Sarkozy expressed hope in a statement that "the United Kingdom and France, as partners in the European project in which their common future is taking place, will continue to contribute to the progress of European integration in the confident and friendly spirit that inspires them."

"[David Cameron], like all of us, would have preferred to have a Conservative majority victory, there's no doubt about that. But I think you'd be wrong to say he went further than he needed to. This is a genuine compromise between the parties," said Foreign Secretary William Hague

"But there were many things the Liberal Democrats have had to swallow, that they've had to agree to that were very difficult for them and we've respected that through the negotiations, just as there are some things like holding a referendum on a new voting system that are very difficult for the Conservative party to accept.

"That means of course there will be people in both parties who quietly wish it hadn't happened, I'm sure. But the acclamation for this agreement among both parliamentary parties was very strong last night and I think if we can continue to work in this way than any little resentments will be put into perspective," Hague said.  

Cameron and Clegg "have fairly similar positions on the emergency of the economic crisis, or on social issues. Both think that individual liberties have been somewhat held under the Labour government," said Pauline Schnapper, professor of contemporary British civilisation at the Sorbonne University in Paris, at a conference organised by the Centre d'Etudes et de Recherches Internationales (CERI), yesterday (11 May).

However, she said doubts remained as to reform of the voting system and Europe. "How will they promote a common European policy with so many disputes?" she asked.

"There is a close link between the Conservatives and the Lib Dem as the party was founded by former Labour dissidents," said at the CERI, Agnès Alexandre-Collier, professor of British studies at the University of Burgundy.

"Nick Clegg represents the right wing of the Lib Dems", she said. "The Lib Dem leaders are quite close with conservatives, but the differences are rather more marked for the left wing of the party and the voters," she added.

"It seems that David Cameron and Nick Clegg will have more difficulties within their own parties than between them in completing the coalition," said Dave Allen, professor of international and European relations at the University of Loughborough in the United Kingdom, at the CERI conference.

"The opposition may come from the chiefs of the Conservative Party. The transition is interesting: many said that the coalition would never work. Yet, one can note a certain chemistry between Nick Clegg and David Cameron," he added.

Britain's opposition Conservatives became the largest party in parliament after the closest election in three decades (EURACTIV 07/05/10). But the UK now has a "hung parliament" without a clear majority.

The Tories secured 306 of the 649 constituencies. It leaves the party short of the 326 MPs needed for an outright majority.

Labour finished with 258 MPs, down 91, the Lib Dems 57, down five, and other parties 28.

Had Labour and the Lib Dems joined forces, they would still not have had an overall majority. 

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