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British PM Cameron's Victory Hangover: Showdown with EU, Scotland

PM David Cameron faces a huge hangover from his election victory celebrations - two constitutional crises that will rattle Washington’s oldest ally.

LONDON – David Cameron was celebrating what he called “the sweetest victory of all” Friday after his Conservative Party confounded poll predictions by securing a majority, giving him a second term inside 10 Downing Street.

But the prime minister faces a huge hangover from his election triumph — a constitutional crisis that threatens to rattle Washington’s key ally.

Among the promises Cameron made on the road to victory was a national referendum in 2017 on whether to quit the European Union, a move that dismayed fellow leaders including Germany’s Angela Merkel.

His victory also owes much to the separatist Scottish National Party which made crushing gains in Thursday’s poll, winning 56 out of 59 seats in Scotland.

With its resounding new mandate, the SNP is well-placed to demand concessions from London including more devolved powers and the possibility of a second referendum on national independence. The party came close to winning a "yes" vote in last year’s poll, which would have ended the 300-year-old United Kingdom in its current form.

A British exit from the EU is unlikely, based on opinion polls including a YouGov survey on February that found 45 percent of Brits would vote to remain, against 35 percent who would choose to leave.

But the prospect of a rancorous public debate about unloved Brussels bureaucracy has spooked the money markets and Britain’s key political allies who fear the “Brexit” campaign could spread across the English Channel into a wider anti-EU movement.

"Britain is now an island of nations with differing political structures"

Cameron promised the referendum in a bid to stem the flow of right-wing supporters towards the fringe anti-Brussels U.K. Independence Party (UKIP). He has gambled that he can use the two-year gap to renegotiate Britain’s terms of membership, capping immigration and reducing its annual contributions.

“Businesses don't like that kind of uncertainty,” Anthony Browne, chief executive of the British Bankers' Association, told the Financial Times. “Some members have told me that their investment decisions have been affected by the referendum question.”

Cameron has seen off the threat from UKIP, but his counterparts in Europe have signaled they are not inclined to make concessions.

Jean-Claude Juncker, president of the EU's executive European Commission, said it would examine any British proposal for new terms "in a polite, friendly and objective way," a commission spokesman said.

In Scotland, SNP leader Nicola Sturgeon on Friday repeated her insistence that independence was not the immediate priority, but signaled battles ahead with the Conservatives.

"Even a majority Conservative government cannot ignore what happened in Scotland yesterday. There has been an overwhelming vote for Scotland to have a louder voice at Westminster and an overwhelming vote against continued austerity," she told the BBC.

But some voters still scented another chance to break with Britain. "I'm delighted about the SNP result," said Mary Haxton, a 60-year-old university worker in the oil city of Aberdeen. "Scotland can move forward itself. Why should we have to kowtow to Westminster when we can do it on our own?" she told Reuters.

The political tension between Scotland and the rest of the U.K. is likely to be a leitmotif for Cameron's second term.

“Britain is now an island of nations with differing political structures,” said Colin Rallings, professor of politics at the University of Plymouth. “We will have find a way to resolve these constitutional issues or it bodes ill for our island.”

There are other post-celebration headaches for Cameron. With a working majority of only three or four seats in the House of Commons, he will face a constant threat of internal rebellions that could stymie legislation.

There are strong parallels with the 1992 Conservative government of John Major, which limped from crisis to crisis as his own party tore itself apart, once again issue of the E.U.

“In many ways, a government with a thin majority will be less stable than a coalition would have been,” constitutional expert Vernon Bogdanor told ITV News.

Cameron did not shy away from these challenges as he made his acceptance speech on the steps of 10 Downing Street on Friday.

"Yes, we will deliver that in-out referendum on our future in Europe," Cameron said after visiting Queen Elizabeth to start the process of forming a new government.

"In Scotland, our plans are to create the strongest devolved government anywhere in the world with important powers over taxation, and no constitutional settlement will be complete if it did not offer also fairness to England," he said.

Reuters and The Associated Press contributed to this report.