Quotes of the Day

Only days after the formation of the U.K.'s new coalition government, Foreign Secretary William Hague's first overseas visit was to meet with U.S. Secretary of State Hillary Clinton in Washington, D.C. The main topics of discussion last Friday were Afghanistan and Iran, issues on which, earlier this month, Prime Minister David Cameron's Conservatives and Deputy PM Nick Clegg's Liberal Democrats substantially disagreed. With voters forcing the Tories and the Lib Dems to work together, the order of the day is compromise, and both sides have been forced to abandon or trim some of the policies they have held so dear for so long.

Exactly how all this will play out over the coming weeks and months is impossible to predict — Britain is in uncharted territory. But of the key polices already settled, here is where the new U.K. government stands:

Relationship with the U.S.
It will be a struggle for Conservative Cameron to form as close, and as unlikely, a relationship with Democratic President Barack Obama as Labour's Tony Blair did with Republican George W. Bush. But it was a clear sign that the Britain's much-loved "special relationship" with the U.S. will continue when Obama became the first international leader to phone Cameron after his ascension to Downing Street on May 11.

The relationship between Secretary of State Clinton and her British counterpart Hague may not be quite so special. It's hard to see Clinton developing quite the same warm, almost gooey, bond with Hague — a blunt Yorkshireman who once claimed he drank 14 pints of beer a day when working as a drinks delivery man — as she did with his predecessor, the smooth, Oxford- and MIT-educated David Miliband.

The key policy issues in play during Hague's visit are Afghanistan and Iran and, despite severe differences between the two halves of the coalition government over these issues, there are unlikely to be any big changes in approach. On Afghanistan, that involves continuing the ongoing operations with a view to leaving only when the country can police itself. And on Iran, it means insisting Tehran must fall in line with the international community over its nuclear program. The biggest potential source of tension on Iran is the Lib Dems' previous policy of opposing any military action against the country.

Place in Europe
Conservative relations with the European Union have always been a source of strife within the party, whose hard-line Euroskeptics want maximum repatriation of powers or even outright withdrawal. Cameron tried to heal the rifts by pulling his party in Brussels out of the center-right European People's Party — which includes leaders like Germany's Chancellor Angela Merkel and French President Nicolas Sarkozy — and creating a new grouping of right-wing leaders, among them Michal Kaminski of Poland's Law and Justice Party, which has banned gay marches, and the Czech Republic's ODS, whose founder Vaclav Klaus has denounced climate change as a myth. Cameron has been attacked for weakening the Conservatives' influence in the E.U. as a result, while Clegg declared during the election campaign that his future coalition partner had allied himself in Europe with a "bunch of nutters ... and homophobes."

Now that Cameron is in power, however, other E.U. leaders will have little choice but to deal with him. His previous decision to rule out ever joining the euro has been watered down to "not in the lifetime of a Parliament" — which will mean the next five years if the government pushes through its plan to introduce a fixed term — as a compromise with his new coalition partners, who have long advocated joining "when the time is right." But the economic crisis currently buffeting the euro zone has made this pretty much a nonissue. No further powers will be ceded to the E.U., in any event, without a referendum.

The Economy and the Deficit
With Britain crawling out of recession, showing just 0.2% growth in the first quarter of the year, and with a $245 billion deficit hanging over the country, the economy is the big one. Cameron's Tories, under new Chancellor George Osborne, have long been calling for an immediate $8 billion cut in spending, which both the Lib Dems and the defeated Labour government claimed would do immense damage to public services and could pitch the U.K. into a double-dip recession.

However, with an emergency budget planned within the new government's first 50 days, the Tories will get their wish. As an example to the country, Cameron announced that all his ministers will have a 5% pay cut, reducing their annual salaries to about $195,800. Only Britons' much cherished National Health Service and the international-aid budget have been protected from the expected 15% cuts across all government departments, with a specific pledge that health spending will rise above inflation.

Immigration
Immigration has long been the issue that dared not speak its name for fear of raising cries of racism or xenophobia. But the widening of border-free Europe to 27 states, including former Eastern European nations, has given millions of citizens the right to work anywhere in the E.U. and has put the issue near the top of the political agenda.

The Liberal Democrats have conceded defeat here, abandoning their policy of an amnesty — which they called "earned citizenship" — for the unknown number of illegal immigrants currently in the U.K., and accepting Conservative plans for an as yet unspecified annual cap on the number of immigrants allowed into the country each year.

Defense
Britain's U.S.-made Trident submarine-based nuclear-missile system has long been a source of debate over its desirability in a world looking to reduce nuclear weapons, its usefulness in a post–Cold War era and its claimed independence from U.S. permission to launch.

The previous Labour government planned to replace the current system as it reaches the end of its shelf life in the mid-2020s. The Conservatives agreed, but the Lib Dems, supported by some former defense chiefs, demanded a full review of alternatives, claiming that a decision to replace need not be made now. The Conservatives got their way on this one, but this remains an issue of high controversy that can be expected to return one day to trouble the new coalition government.

• Nick Assinder / London
• Compromise will be the key to determining how the new Conservative-Liberal Democrat coalition will answer major policy questions