Conservative Victory Moves U.K. Closer To EU Exit

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MELISSA BLOCK, HOST:

There were many startling results out of yesterday's election in the UK. Voters gave a resounding victory to conservative Prime Minister David Cameron. Labour leader Ed Miliband resigned after his party was demolished. To the north, the Scottish National Party plowed across Scotland, winning nearly every seat. But the biggest issue facing Britain coming out of this election could be the rest of Europe. The Prime Minister has promised to let British voters decide whether the UK should stay in the European Union. NPR's Ari Shapiro reports that is now sending ripples across the continent.

ARI SHAPIRO, BYLINE: Today, David Cameron stood in front of number 10 Downing Street and announced the creation of a new government.

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DAVID CAMERON: I truly believe we're on the brink of something special in our country.

SHAPIRO: He repeated a handful of his campaign promises and delivered this line within the first two minutes.

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CAMERON: And, yes, we will deliver that in-out referendum on our future in Europe.

SHAPIRO: So this does not look like one of those campaign promises that the candidate conveniently forgets after voters put them in office. Apparently, the referendum will happen.

JUDY DEMPSEY: Oh, this is big. I mean, this is bigger than ever.

SHAPIRO: Judy Dempsey writes the Strategic Europe blog for Carnegie Europe.

DEMPSEY: For Britain to leave the EU as a major economy, as a major security and defense country, this would be a huge loss. And heaven knows what it would do for the integrity of the EU as a whole.

SHAPIRO: At the Bertelsmann Foundation in Germany, Andreas Esche has tried to calculate the financial damage that might come from Britain leaving the European Union.

ANDREAS ESCHE: In the most difficult scenario, that would add up to something like 300 billion euro a year.

SHAPIRO: That sounds like a huge earthquake for Europe.

ESCHE: That would be, but most - mostly for Great Britain itself.

SHAPIRO: Esche explains it this way - imagine you're a car company that wants to sell vehicles in Europe.

ESCHE: Where would you build your factory? You wouldn't build a factory to sell cars in Great Britain. You would do it to sell cars in Europe. So you would definitely not invest in Great Britain if you're not sure that they will still belong to the union.

SHAPIRO: The uncertainty starts now. After all, companies make these kinds of decisions years in advance, and a 2017 referendum is not that far away. So if this vote could cause Britain so much financial pain, why does Cameron want it? Part of it is pressure from his right wing. Going back decades, isolationists in Britain have complained about regulations from Brussels. They bristle over immigration. Cameron says too many Eastern Europeans come to the UK looking for jobs. This was a speech last year.

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CAMERON: In some areas, the number of migrants we're seeing is far higher than our local authorities, our schools and our hospitals can cope with.

SHAPIRO: Cameron has fumed at the fees Britain has to pay the EU. He said this last year in Brussels when the UK got stuck with a surprise bill.

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CAMERON: It's an unacceptable way to treat one of the biggest contributors to the European Union.

SHAPIRO: Next month, there is an EU summit. Cameron will likely show up with a list of demands to change Britain's relationship with the EU, but Europe may not be able to meet those demands, says Fabian Zuleeg. He runs the European Policy Centre, a think tank in Brussels.

FABIAN ZULEEG: I think there's a real problem here. To get meaningful reform at the European level within this kind of timescale - because in the end we have 28 countries which have to agree to this - is very difficult.

SHAPIRO: Prime Minister Cameron insists he would rather use this referendum as leverage to get Britain a better deal. Then, he says, British people would vote to stay in the EU. But as everyone in the UK saw last night, once you give people a vote, it's impossible to predict what they will choose. Ari Shapiro, NPR News, London. Transcript provided by NPR, Copyright NPR.