The U.K.’s hung parliament is a bad thing — but it doesn’t have to be

As Britain is now into its fourth day of a hung parliament, some of the gallows humor here in London is asking whether the country is in fact the world’s newest ungoverned state. Not that Britain is at any risk of becoming the Somalia of the North Sea, especially since the negotiating process thus far between David Cameron’s Tory team and Nick Clegg’s Liberal Democrats has been calibrated to send positive, reassuring signals to the British public and (perhaps even more importantly) global markets. A range of outcomes remains possible, but as the very well-informed Tim Montgomerie points out, a Cameron-led minority government (with LibDem support) seems most likely at this point, rather than a formal Con-LibDem coalition government that elicits much wailing and gnashing of teeth from the bases of both parties.

But considering that the last hung parliament dates back to 1974, this is almost unprecedented territory. And a possible Labour role in forming a government even lurks in the background, as the hapless Gordon Brown clings to the doorway at 10 Downing Street while dispatching Labour emissaries for covert overtures to the LibDems.

Still, it is very likely that within a matter of days (or perhaps even hours), some type of deal will make David Cameron the newest British prime minister. He will preside over a hung parliament and unstable government, and likely have to call a new round of nationwide elections within a year. Consistent with the no-one-really-knows-what-will-happen theme, herewith four reasons why the U.K.’s hung parliament is a bad outcome — and two reasons why it could be a good thing.

The Bad:

• Continued inaction on Britain’s fiscal crisis. The U.K.’s budget deficit currently stands at around 12 percent of GDP — a staggering, and staggeringly irresponsible level. If that number doesn’t mean much to you, then consider by comparison that Greece’s budget deficit is around 9.3 percent of GDP. A fragile coalition or minority government in a hung parliament simply may not have the electoral mandate, political will, or even just votes to take the hard but necessary budget cuts. Yet as Margaret Thatcher’s illustrious Chancellor Lord Lawson (who knew a thing or two about inheriting a fiscal crisis) points out, global markets will demand urgent and resolute action.
• No clear leader in a time of need. Cameron as Prime Minister will be constantly tending to his unwieldy, fractious coalition, while also being mindful of another looming election — and just will not have the job security and support to lead Britain on the world stage. This hinders President Obama as well, as a hung parliament is not conducive to Obama building a firm relationship with the new U.K. leader. In other words, this may not be the needed "re-set" button for the Special Relationship.
• No firm anchor for the EU. Amidst the tumult in Britain, it can’t be forgotten that the EU itself is facing its own crisis of legitimacy. Sunday’s German election results sent a resounding "nein" to Chancellor Merkel’s bailout package for the profligate Greeks, and were the latest body blow to the buffeted EU project. Britain in recent years has played a helpful dual-role vis a vis the EU: helping interpret the EU to the U.S., and helping channel the EU in constructive directions while restraining it from its worst impulses. A hamstrung U.K. government cannot play any of these roles, even in the EU’s hour of need.
• No clear posture for national security decisions. Though national security issues played almost no role in the campaign, the pressing issues remain, including the U.K.’s sizable troop deployment in Afghanistan, an aging nuclear deterrent, and the ongoing threat of terrorist attack. A U.K. government distracted by domestic politics cannot be an effective government on international politics.

Or, the Good (hopefully):

• A clarifying moment. Apropos of the first bad reason above, a hung parliament can also be a clarifying moment for the nation. The voters have spoken, but the market functions as a powerful electoral voice as well — and the risk of deepened economic crisis, credit rating downgrade, a plummeting pound, or even a reprise of the 1976 IMF bailout may all provide the clarifying moment and political will that Britain needs to make difficult but necessary economic choices.
• An opportunity for Cameron. He stands at the crossroads and faces the question: will he be a caretaker leader or a transformative leader? He pursued a "split the difference" campaign strategy of waffling between muddled centrism (e.g. no NHS cuts, vague talk of a "Big Society" which as my colleague Ryan Streeter points out means "bungled Parliament") and principled conservatism. British voters responded to this strategy by splitting the difference themselves between Tories, Labour, and LibDems. Cameron now has to navigate now a restive base that feels bamboozled by his "rebranding" and the realities of coalition governing. But this may be his opportunity to show his stature as a true national leader, by abandoning the focus-group marketing and following the path of principle. Which just might be rewarded by voters when given a clear choice the next time around.