LONDON, May 17 (UPI) -- Honeymoons are usually times of enchantment and the mood in Britain this week after the formation of the ground-breaking coalition between the Conservatives and the Liberal Democrats has been rapturous.
But inevitably normal life will at some point resume. And the untried new coalition with its sudden exciting chemistry between the two leaders David Cameron and Nick Clegg will face some daunting and wholly predictable challenges.
The first is the dire state of the economy, with a budget deficit of more than 11 percent of gross domestic product. The new government is to introduce an emergency budget next month. It will without doubt contain some savage spending cuts and somber tax increases.
The first joint Cabinet meeting of the ministers of the new coalition agreed that they would cut their on salaries by 5 percent. It is widely expected that something similar is in store for public sector pay. The markets will demand such proof that the new government is serious, after Ireland cut the pay and pensions of its public servants by almost 20 percent, Greece is cutting by 7 percent and Spain last week announced a 5 percent public pay cut.
These cuts, or perhaps pay freezes for a number of years, will certainly affect Britain's civil servants, although various campaign promises imply that the military, the police and the doctors and nurses of the national health service will be spared. Even more money may have to be pared from the extraordinarily generous pension deals for public servants in Britain. They are inflation protected, linked to the final (and therefore highest) years of salary, and therefore unaffordable.
There will therefore before the end of this year be resentment and probably strikes that could affect wide swathes of public life, from interruptions in pension and social security payments to angry demonstrations by elderly pensioners.
This leads to the second bracing dose of reality that will truncate the honeymoon. The inevitable cuts and financial rigor will create interesting political opportunities for the Labor Party, which by the end of the summer will have a new and younger leadership, relatively unbruised by the sour and dispiriting decline of Gordon Brown's administration.
Whether it be former Foreign Secretary David Milliband or his brother Ed (former environment secretary) or Brown's henchman Ed Balls (former education secretary), Labor's new leader will know that his party is fighting for its life and must therefore go relentlessly on the attack.
Labor is haunted by the memory of Margaret Thatcher's musings of the 1980s that she hoped that socialism as a creed, and Labor as its vehicle, could be destroyed. Her dream was that the Liberals and moderate social democrat wing of Labor could ditch the left and the militant labor unions and become the natural alternative party of government. To avoid even a threat of this fate, Labor must use this period of coalition government to discredit and divide the Lib Dems.
"This coalition brings together Britain's biggest spenders and its biggest cutters, its most ardent Europhiles and Europhobes," former Labor Minister Andrew Adonis said last week. "If this government lasts five years, it will have defied every conceivable law of political gravity."
Labor's target will be that wide swathe of the Liberal Democrat party's rank-and-file (and its members of Parliament) who are genuine radicals, including the passionate environmentalists and fanatical pro-Europeans and anti-capitalists who will find themselves most at odds with the compromises of coalition.
The Lib Dems have already had to surrender their commitment against more nuclear power stations and know that their new Tory allies are widely hostile to the European Union. The Lib Dems have soft hearts and will warm to the plight of the pensioners and unemployed and local government employees who will bear a large part of the cuts to come. They are likely to prove a target-rich zone for Labor.
A further dose of reality will be delivered by the Conservative Party, which have already surrendered one of its cherished campaign promises, to raise the threshold at which inheritances taxes are imposed. There will be more Conservative heartache to come, including the near-certainty of a rise in the value added tax from 17.5 to 20 or even 22 percent.
The bulk of the Conservative MPs are Thatcher's children, profoundly skeptical of Europe and of taxes and of the state, and still strongly attached to the uncomplicated ideology of free market principles. Many of them have never warmed to Cameron's shift of the party to the electable center and most are dismayed by his promise of a national referendum on a system of proportional representation known as the Alternative Vote, which is likely to mean that neither Conservative nor Labor will ever again be in a position to govern alone. The Lib-Dems are likely always to hold the balance of seats in an AV Parliament.
"When it comes to the crunch, the splits will begin to show," notes Alastair Campbell, Tony Blair's former media czar.
The first crack in the coalition will be tested this week, when the French and Germans are seeking to ram through a new European system of regulations for hedge funds that would disproportionately hurt the City of London. It would also penalize Wall Street and the Obama administration's protests have been brusquely ignored.
The Lib Dems love Europe and the Tories despise it and the coalition must find a way to manage this crisis and its potential split. There will be more such tests to come. The honeymoon may be magical; the marriage will be bumpy.
