Brits form coalition

Conservatives led by David Cameron will form a coalition government with Liberal Democrats led by Nick Clegg. The announcement came after the 43-year-old Cameron arrived at 10 Downing Street, having been confirmed as prime minister by Queen Elizabeth Tuesday evening.

The announcement came five days after the May 6 elections resulted in a hung parliament, and both the Conservatives, or Tories, and the ruling Labour Party fought over Liberal Democrats to form a coalition-Great Britains first such government since 1945. Crowds lined the streets of London leading to Whitehall, where government offices are located, to get a glimpse of Cameron and his wife, who is expecting a baby in September, as they made their way to their new residence.

Cameron told the crowd, "Her Majesty the queen has asked me to form a new government, and I have accepted." He paid tribute to outgoing Labour Prime Minister Gordon Brown and then said, "We have some deep and pressing problems, a huge deficit, deep social problems, and a political system in need of reform." He said he aimed to form "a proper and full coalition" with Cleggs Liberal Democrats because "that is the way to provide this country with the strong, the stable, and the good and decent government that we need so badly." The two sides will "put party differences aside," said Cameron, adding that they will work for the good of the nation.

Already that has meant painful-and perhaps ultimately unpopular-compromises. Liberal Democrats will have up to six cabinet seats, and Clegg will serve as deputy prime minister. They have successfully forced Conservatives to back off giving tax breaks to married couples, along with tax cuts on the UKs inheritance tax, as part of tax reforms Tory parliamentarians successfully campaigned on. Conservatives say under the agreement they will press forward with new immigration restrictions and stepped-up security measures.

Clegg seized the opportunity to hold talks with Labour over the weekend, something pundits say was more a tactic to wrest compromises out of Camerons Conservatives than a real opportunity for coalition building.

While the Liberals seemed to have much more in common with the Labour Party, what became known as a "LibLab" coalition had no chance to materialize once it became clear that Labours Scottish nationalist and its northern members would not go along. They oppose voting reforms favored by the Liberals and Londons Labour reps. "If there wasnt so much at stake for the country it would be rather amusing, in a way," noted Scottish journalist and Wall Street Journal Europe deputy editor Iain Martin. "The metropolitan political class has been a taught a lesson and reminded of the perils of choosing to talk only to itself."

But it wasnt only Labour learning a lesson. Tories also miscalculated, according to Martin: "The Tories didnt think this through, or consult widely enough before opening their negotiations." Camerons team tried to outflank Labour by offering Liberal Democrats major concessions that in the end werent needed to woo it into a Conservative coalition.

Whatever the cost, a Cameron-Clegg partnership will be tested early: Britain faces record high deficits-the largest in the 27-member European Union-at a time when Greece and other EU nations are themselves on the verge of financial collapse.