MARGARET WARNER: For more we get three perspectives, from Matthew Parris, a columnist for the Times of London. He was a Conservative member of parliament from 1979 to 1986.
Martin Walker, a former correspondent for the Guardian newspaper. He's now chief international affairs writer for UPI and he's also senior director of the Global Business Policy Council, a for-profit think thank.
And Michael Elliott, the deputy managing editor of TIME magazine and editor of its international edition.
And welcome to you all. Michael Elliott, let me begin with you. What do you think the British people were saying in this election?
MICHAEL ELLIOTT, TIME Magazine: Well, Margaret, I think they were -- I think they were saying that they didn't particularly like any of the choices that were in front of them.
Gordon Brown lost this election. I think that's pretty plain. After 30 year in government and a tired administration, the electorate pretty clearly shows that they've had it with him, losing 90 seats or whatever it was.
At the same time to use what has sort of become a cliché over the last few years, David Cameron, the leader of the Conservative Party, didn't manage to close the sale. I don't think he's particularly -- particularly loved by the great mass of the electorate.
As for the Liberal Democrats, who had their moment in the sun a couple of weeks ago, I always trust my wife on these matters because she is the best observer of British politics, I know. And she has been saying for the last week the Lib-Dems won't poll nearly as well as the opinion polls are telling us. And she was absolutely right.
They came in at about 23 percent after the polls were saying 26, 27. So I think there's reason for all three parties to be pretty disappointed about the outcome. I think if you stand back and look at this in the round, you would say that Britain has a center left majority in terms of its politics in society.
The Tories didn't manage to do more than 36 percent going against, as I say, a very unpopular administration. And I think they'll be pretty disappointed with that.
MARGARET WARNER: Matthew Parris, is that how you see it? That really was kind of a pox on all their houses?
MATTHEW PARRIS, The Times: No, I don't see it like that. You cannot have a three-horse race in which all three horses -- had they taken a realistic view of that prospects -- could be disappointed by the results.
The fact is the Labor Party lost nearly a hundred seats in the 650 feet legislature. The Conservative Party achieved the best result that they have in 80 years and the better result than Margaret Thatcher achieved when she came to power. And the Liberal Democrats did just about as well as they did last time.
What is fair to say is that the Conservative Party would have hoped really to have swept the board on a great wave of national enthusiasm for a right of center alternative to Gordon Brown and they didn't do that.
The electorate have shown that they don't care for Gordon Brown.
They've shown that they're not entirely persuaded by the kind of doe-eyed chat-up lines of the center party candidate Nick Clegg, the leader of the Liberal Democrats, but they are still a little bit cool about David Cameron.
And he's got, I think, some important battles to win in wing the confidence of the electorate. But there's no question he is by far -- he leads by far the largest party in the House of Commons now. No question. But that he should be prime minister and given the chance to try.
MARGARET WARNER: Martin Walker, follow up on that but let's get right into also the horse trading.
David Cameron and Nick Clegg have talked today, we're told. What are Cameron's calculations? What are the prospects for the Tories and the Liberal Democrats actually do a deal here and come up with a coalition government?
MARTIN WALKER, United Press International: Well, the real problem is that the British people didn't speak, they mumbled and they sort of shuffled their feet and they couldn't really make a decision.
And what's extraordinary is that Gordon Brown should have lost by a greater amount than he did because it's the worst economic recession for 80 years. An exhausted government after 13 years in office. But Labor is not down and out.
What's remarkable, if you look at the vote is that the Tory vote, the conservative vote, shank as you went north up the country and virtually disappeared in Scotland. So a pure conservative government would not represent the country as a whole.
The conservatives would need support from the Liberal Democrats.
Labor-Democrats would have over 50 percent of the vote. They would have some kind of legitimacy in that sense.
The real problem now is that the terms on the Liberal Democrats demand which is for forced representation --
MARGARET WARNER: Changing the voting system, essentially.
MARTIN WALKER: That's right. So that instead of first past the post, we would have a proportion of number of seats depending on how many vote you got. That would put the Liberals into the position of being virtually in power forever.
And so far Cameron is not prepared to go that far. He's promised a House of Commons committee to discuss it. Gordon Brown has already promised instant legislation. And so for the Liberals, they must now make that choice.
Do they go with Gordon Brown or Labor where they might demand that Brown himself goes, or do they go with the Conservatives with whom they disagree profoundly over things as important as relations with Europe.
MARGARET WARNER: Matthew Parris, what do you think are the prospects for any -- either of these two major parties wanting to make a deal with the Liberal Democrats when, in fact, if you had a whole different voting system without getting into all the details, those two, the Tories and Labor, would eliminate the kind of duopoly on power that they've had for quite a while.
MATTHEW PARRIS: The prospects are very good. It isn't the case that Labor plus the Liberal Democrats would have more than half the seats.
They wouldn't. That's one of the problems. And the Liberal Democrats plus the Conservative Party would have a very convincing majority.
But the question is, are they of one mind? Are they -- do they see things sufficiently closely to make an effective coalition as it were government?
And I think that they do. The Liberal Democrats and the Conservative Party believe in the free market. The Liberal Democrat its and the Conservative Party both believe in the liberty of the individual.
They have important differences on the European Union. I think those differences can probably be settled. The really big difference between them is the Tories. The Conservative Party don't really want to change the voting system. The Liberal Democrats do.
I think the solution is probably a grand commission of some kind to look into it and put conclusions to the electorate in a referendum in about a year's time.
I will fully expect Nick Clegg and David Cameron after two or three days of talking to come to some sort of arrangement to -- in which the Conservative Party will lead a minority administration and the Liberal Democrat Party on the basis of prearranged discussions will support it from the outside.
MARGARET WARNER: Michael Elliott, your view on all this?
MICHAEL ELLIOTT: I think Matthew is absolutely right. I think that's exactly what is going to happen. I think David Cameron is going to form a minority government as Harry Wilson did in rather similar circumstances in February 1974.
I think the Liberals will stay out of a formal coalition but offer the Conservatives support on something like an agreed plan.
I think Matthew is also right that David Cameron has a right to try that, to try and be prime minister, and claim he has the largest number of seats in the House of Commons, and I think he's entitled to try that.
And the liberals will find --
MARGARET WARNER: So let me just -- let me just ask you, though, Michael. So you're saying then Gordon Brown -- you don't think he'll ever even give himself the chance to form a government with the Liberal Democrats?
MICHAEL ELLIOTT: I think Nick Clegg has been principled and brave in saying that he would talk first to the person who won the most number of seats and the highest proportion of votes. And that plainly is the Conservative Party.
I think it would be extraordinarily difficult for the Liberals, notwithstanding the fact Liberal Democrats, notwithstanding the fact that they have some key policy agreements with the Labor Party, particularly on electoral reform, to appear to prop up the prime minister who has been widely rejected in the country.
I am not sure that that would be a long-term sensible bet for Clegg to make.
MARGARET WARNER: Let me end quickly with all three of you on a bigger picture question which is the pound sterling took another beating today.
The European markets are troubled by this indecision.
Martin, beginning with you, what kind of pressure does that put on -- for a quick resolution here but then what does this muddled result say about the prospects for any British government to take the tough steps it has to do to deal with this huge deficit it has?
MARTIN WALKER: Well, it sharply, sharply cuts the time available for the politicians to operate and to haggle over the terms because the political timetable is running much more slowly than the market's timetable.
I think they have to reach a deal by Monday or Tuesday otherwise an economic crisis, higher interest rates, collapse of the pound, start becoming possible.
The real -- I think the real issue now is going to be whether there is going to be enough of a consensus among the two of the -- the two key parties, Liberals, Conservative and the Labor Party as well, to come to some kind of national agreement about the sheer depth of the cuts that will have to be made. It's a 13 percent budget deficit.
MARGARET WARNER: Second only to Greece, I believe.
Matthew Parris, briefly on that point.
MATTHEW PARRIS: I entirely agree with that. We are as a nation dancing on the edge of an abyss. And any party that looks as though it's just concerned with feathering its own electoral nest or making complicated complications for the other two in dealing with the crisis is going to be rejected decisively by the electorate.
The electorate are looking for grown-up politicians to deal with each other and come forward with a national plan to preserve it in these difficult circumstances. And I think all three political parties are very conscious of that.
MARGARET WARNER: Michael Elliott, do you think so? Do you think we're going to see this kind of national consensus?
MICHAEL ELLIOT: I'm not sure that we will. Although the markets might force it. I expect it'll be a -
MATTHEW PARRIS: The electorate are looking for a grown-up politicians to deal with each other and come forward with a national plan to preserve us in these difficult circumstances. And I think all three political parties are very conscious of that.
MARGARET WARNER: Michael Elliott, do you think so? Do you think we're going to see this kind of national consensus?
MICHAEL ELLIOTT: I'm not sure that we will, although the markets might force it. I expect that there'll be a flight to dollar-denominated assets and to the dollar on foreign exchange markets next week, there'll be pressure on the euro and the pound, and that the global economic outlook after this election and after the Greek crisis, the Eurozone crisis, is going to have us all thinking about broader topics than the make-up of the House of Commons.
MARGARET WARNER: Well, thank you very much for joining us this evening and explaining both. Michael Elliott and Matthew Parris and Martin Walker, thanks.