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Hung Parliament; Britain Decision Day. Aired 3-4a ET

Aired June 9, 2017 - 03:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(COMMERCIAL BREAK)

[03:00:00] MAX FOSTER, HOST, CNN: Hello from outside 10 Downing Street in London. I'm Max Foster with continuing coverage of the snap election here in the U.K.

The official results will be a hung parliament, and that could mean big trouble for the woman who called the vote in the first place, the Prime Minister Theresa May. U.K. media saying she's not expected to resign, but she went into this campaign as a double-digit favorite, a sure bet to pad her majority and strengthen her mandate for Brexit talks. Of course none of that happened.

And with just 10 days until those negotiations begin, Mrs. May's platform of stability is looking rather ironic. That could be true for the U.K. markets as well.

They just opened moments ago, so we'll bring you the figures as they come through to us. Hung parliaments aren't good for markets. Let's just say that. The British pound has already taken a hit.

The conservatives will remain the largest party having said that, but they'll need the democratic unionists to form a working majority and get laws through. They pledge they'll support if conservatives will likely survive this to an extent, but they may very well have a new leader at the helm.

The Labour Party made the biggest gains behind a spirited campaign from the labour leader, Jeremy Corbyn, and the Scottish Nationalist Party came in a distant third, taking big losses of their own.

Mrs. May have suffered a humongous backfire by any measure her mandate as prime minister has been severely damaged and perhaps irreparably. But she made it clear the conservatives will press forward regardless. Take a listen.

(BEGIN VIDEO CLIP)

THERESA MAY, BRITISH PRIME MINISTER: As we ran this campaign, we set out to consider the issues that are the key priorities for the British people, getting the Brexit deal right, ensuring that we both identify and show how we can address the big challenges facing our country, doing what is in the national interest.

That is always what I have tried to do in my time as a member of parliament, and my resolve to that is the same this morning as it always has been.

As we look ahead and we wait to see what the final results will be, I know that as I say, the country needs a period of stability. And whatever the results are, the conservative party will ensure that we fulfill our duty in ensuring that stability so that we can all, as one country, go forward together.

(END VIDEO CLIP)

FOSTER: Go forth together. She's certainly planning on going forward with the party, it seems. If that's the case, then she's inside forming a new government as we speak. We expect to hear what sort of shape that will take place -- that will take when she comes out a little later on.

But we haven't been given exact timings on that. It seems to be a moveable piece. Everything is at the moment.

Mr. Corbyn played a spoiler in all of this, he had the biggest role in turning the conservatives' dream upside down, making strong gains for his party while dealing a gut punch as well to its biggest rival. He claimed a spiritual victory speaking to his supporters earlier on.

(BEGIN VIDEO CLIP)

JEREMY CORBYN, LABOUR PARTY LEADER: Politics has changed, and politics isn't going back into the box where it was before because what's happened is people have said they've had quite enough of austerity politics. They've had quite enough of cuts in public expenditure, underfunding our health service, underfunding our schools and our education service and not giving our young people the chance they deserve in our society.

And I am very, very proud of the campaign that my party has run our manifesto for the many, not the few. And I'm very proud of the results that are coming in all over the country tonight of people voting for hope, voting for hope for the future and turning their backs on austerity.

(END VIDEO CLIP)

FOSTER: He's currently at his party headquarters speaking to start congratulating them. We heard cheers as he entered the building.

Meanwhile, the Lib Dems have had a mixed night. Former leader, Nick Clegg who serves as Deputy Prime Minister under David Cameron actually lost his seat.

But current leader Tim Farron managed to hold on and they ended the night about where they started. The same couldn't be said about the Scottish National Party, though, who lost two icons in Angus Robertson and Alex Salmond. The leader Nicola Sturgeon says she's looking forward.

(BEGIN VIDEO CLIP) NICOLA STURGEON, SCOTTISH NATIONAL PARTY LEADER: We didn't

necessarily anticipate the lead surge of Jeremy Corbyn, which appeared very late in the campaign and wasn't reflected in the Scottish opinion polls. Of course, clearly Brexit and independence which, you know, will be a factor in tonight's result.

[03:05:03] So, you know, a lot of thinking for the SNP to do, but let's not forget this is our second best ever result in a Westminster election. We have won the election on the, I think actually all of the SNP have been re-elected.

(END VIDEO CLIP)

FOSTER: The thing is we're in hung parliament territory, and that means we don't really know what's going to happen next. There's going to be lots of negotiations going on before we make sense of a new government and what position they'll be going into Brexit talks, Hannah.

HANNAH VAUGHAN JONES, HOST, CNN: Yes, absolutely. I think one of the things that has come out of this election so far is that on the one hand, you've got Theresa May and the conservatives who are offering more of the same. Stability, continuity going into Brexit and the like.

Or on the other hand, you have this movement, much more of a movement, even a spiritual movement as Jeremy Corbyn was alluding to with labour, and saying this was about the politics of hope. This was about change and something different, and that does seem in large, in large swaths of the country to have been the winning argument overall.

Political analyst Carole Walker joins me now. Carol, we are expecting to hear from Theresa May at some point. Apparently it's a moveable time as to when she might come and address the public. What do you think she's going to say?

CAROLE WALKER, POLITICAL ANALYST: Well, we're hearing that she has no intention of standing down and that she is working to try to form a government. Certainly I think that many people might be surprised at that. She is a Prime Minister who called an election she didn't really need to call.

Having said that, she wasn't going to call an election, saying that she wanted to get a big, powerful mandate to go into those Brexit negotiations with a strong hand, instead of which she's now, if she does lead the next government, going to be going into them in a much weaker position.

She hasn't got an overall majority. I think one of her first steps is going to be to turn to the Democratic Unionist Party in Northern Ireland. They've got 10 seats. They are a pro-Brexit party. They are very closely allied to the conservatives. And certainly I think she will be able to count on their support but it's going to be a very, very difficult task indeed, and she's going to face the anger of many conservative M.P.'s who are furious the way she has got them into the election and at the way she conducted her campaign. JONES: Lots of finger pointing already and the blame game has already

begun. People who are criticizing Theresa May for having called this snap election which she didn't really want to call, they haven't done it in the first place.

How much is she a political victim, though, of the events, things that have just happened over the course of the last seven weeks, particularly of course because manifestos aside and whether there have been U-turns on that, just from the country's perspective, we have two terror attacks and Theresa May as the former Home Secretary has really been in the limelight, under a lot of scrutiny for policies put in place by her many, many years ago.

WALKER: Two terrorist attacks, serious attacks during the election campaign. Both of them of course causing brief pauses in the campaign. But difficult to see that that particularly shifted voters' minds.

Traditionally, many analysts would have suspected that a terror attack like that might favor the conservatives who are seen as tougher on security, particularly as they've been very, very critical of Jeremy Corbyn's record in the past, of the fact that he, for example, in the past was talking to some people who were considered beyond the pale in Northern Ireland. Critical of his stance. He's opposed to nuclear weapons and so on.

But in fact, the Labour Party managed to turn that around by pointing to cuts in police numbers, blaming Theresa May who had been in charge of the home office at the time. So that played against her.

But I think there are two different factors that are bigger perhaps even in those terrorist attacks. I think the first thing was the whole Theresa May campaign simply failed to take off the ground. There was a disastrous proposal on social care which angered a lot of older people who are worried about how they were going to be paid to be looked after in their old age.

She performed a U-turn on that. She denied she performed a U-turn. She then performed other U-turns during the course of the campaign. A second very significant factor in the vote is the collapse of the U.K. Independence Party vote, and that vote, which everyone expected would go to the conservatives, has instead been equally distributed between the Labour Party and the conservatives.

So it has enabled the Labour Party to hold on to a lot of those seats in the middle of (Inaudible) the north of the country which conservatives had hoped to take.

JONES: Lots of personal criticism, political criticism party-wide as well, and of course the national criticism that always goes with every election.

Carole, thank you much indeed. Max, one of the reasons that Theresa May has been particularly criticized over the last seven weeks is because she refused to take part in any televised debates.

[03:10:02] And so from many people's perspective, she does really wasn't in tune with ordinary people, ordinary voters, and that's something that Jeremy Corbyn really, really seized upon with going out and meeting ordinary people on the streets, meeting labour voters and also trying to bring in those voters previously for other political parties such as UKIP and the like and then bringing them into the labour fold.

FOSTER: OK. Hannah, thank you. Phil Black is outside Labour Party's headquarters in London. An absolute rapturous response to Jeremy Corbyn as he arrived there. But just explain, you know, he's actually quite a divisive figure in the party.

PHIL BLACK, CORRESPONDENT, CNN: Yes, indeed, Max. He arrived here only a short time ago. There was a very warm welcome for him. An honor guard of supporters as he walked through the lobby cheered, applauded, chanted his name.

Welcome not as the old campaign political hero who will be this country's next prime minister but as the leader of a party who has, through his performance in this election, exceeded all expectation, done a lot better than people thought, and succeeded in keeping his adversaries, the Conservative Party from winning an outright majority by themselves.

That in itself was a big accomplishment, and much more successful than so many people thought he would ultimately be at the start of this campaign when all the opinion polls put him at 20 points behind the Conservative Party.

So inside he will be deciding to do what's next, what to -- deciding what to do next because the battle lines have been drawn in a sense. We've heard from the Conservative party and from 10 Downing Street that Theresa May will not be resigning as Prime Minister, that as the leader of the party with the most M.P.'s and the biggest share of the vote, she'll be looking to a form of government of some kind, whereas, inside here, Jeremy Corbyn will be looking at his chances of perhaps forming either a minority government or some sort of progressive alliance or coalition, looking to determine whether or not that is in any way a possibility.

But either way, he is here today, a man and a political leader who has, as I say, exceeded all expectation, performed so much more strongly. And another big challenge for him now will simply be uniting his party behind him because a lot of doubters, the people who simply didn't think Jeremy Corbyn could do so well in a national election campaign, were within his own party.

They were members of the parliament, members of the Labour Party who said in parliament, people who have refused to sit in his shadow cabinet, people who voted no confidence in him during his period as labour leader he must now try and bring them all into the fold as well.

Because the one thing we can be sure of today as a result of this election, and that is that Jeremy Corbyn will not be going anywhere. He will continue to be the Labour Party leader. There will be many people within the party he won't necessarily be excited about that. But it is now Jeremy Corbyn's job to try and extend the hand of

welcome to all of those Labour Party members, particularly parliamentary members who have resisted his leadership of the party for so long, Max.

FOSTER: Isn't it interesting? A real resurgence for him and solidification of his position and his policies in the party. But we do need to cross to the markets now because they've just opened here in London.

Nina Dos Santos is with us because markets don't traditionally like hung parliaments. They create uncertainty. But what's the case today?

NINA DOS SANTOS, CORRESPPONDENT, CNN: Yes, I'm just looking at the figures right now, Max, to keep myself abreast of the situation actually. First of all, let's talk about the British pound because that is the currency that has been suffering right throughout the course of the night.

We look at the British pound as a barometer of instability and also here where the economy is going to be headed, whichever government and whichever party leader is able to cobble together the next government to lead this country going forward through this rather turbulent time which of course will include those Brexit negotiations.

So, British pound was trading at 1.29 before we saw that shock exit poll that seems to have been confirmed. Now it's trading at just above 1.26. So significant depreciation for the pound. Remember it was trading at 1.2535 a couple of years ago before David Cameron made that fated decision to give the British people their say on whether or not they wanted to leave the E.U.

One analyst report I was reading earlier today said that could be the next flaw for the currency. This brings me to the stock markets because the FTSE 100 do not be concerned by this. It has actually risen in the wake of this hung parliament, which is not a situation that you would automatically expect.

The reason we're seeing that, Max, is because we've seen such a depreciation in the currency overnight. What often happens is that when the British pound falls, those companies that traded on the stock market and relying upon exporting their goods, is expected by investors that they will be able to export more because their goods are more competitive. They're cheaper on the international stage, but that's of little concern if you're about to kiss good-bye to your biggest trading partner.

[03:15:02] Speaking of which, the British pound is down 14 percent since the Brexit vote took place, but the FTSE 100 is up 25 percent and another record since as I was saying before that vote happened. Max?

FOSTER: OK. Nina, it's fascinating how the markets buck the trends sometimes. But there you have it and it will be something heartening perhaps to the Prime Minister as she prepares to come out to speak to the world media in light of that pretty disastrous result although she did technically still win.

You are watching CNN's special coverage of the U.K. parliamentary elections. Coming up, more now -- more on how the conservatives have really plunged in fortunes. A lot of it is down to the leader, they say.

(COMMERCIAL BREAK)

BORIS JOHNSON, BRITISH FOREIGN SECRETARY: We've got to listen to our constituents and listen to their concerns. And across the borough, across Ox Bridge in the last few weeks, I've heard all sorts of people raise all sorts of concern.

Even they were going to vote for me, they wanted me to deal with their problems. And I tell you I will work flat-out on behalf of those who voted for me and of course all those who didn't vote for me with equal zeal.

(END VIDEO CLIP)

FOSTER: That's Boris Johnson there, the British foreign secretary. Many people talking about him just a few hours ago as the new potential Prime Minister to replace Theresa May.

But now the U.K. media very firmly saying that she has no plans to step down -- step down. So she must be forming a new government. We're waiting to hear exactly what she plans to do when she comes out to speak to us a little bit later on.

Boris Johnson's remarks coming in the midst of this snap vote here in the U.K. with the official result is a hung parliament. And that could mean big trouble for the woman who called the vote in the first place, Prime Minister Theresa May.

U.K. media again saying she's not expected to resign. But if she did, then Boris Johnson would be one of the replacements. David Dave is is one of the potentials as well. We don't want to sort of make any predictions at this point because anything seems to go.

These are the numbers, how they're stacking up with the last few votes really dribbling in. But that's the broad picture. You can see the conservatives are ahead of labour but the gap is much tighter than anyone expected and also much tighter that Theresa May promised crucially.

Hannah Vaughan Jones is outside parliament, and it's interesting that the smaller parties, they're in power today.

JONES: Yes, and the gentleman I'm going to speak to now can talk a little bit more about when you're a smaller party or when you've actually lost some seats, how you can actually increase your political power, your political influence perhaps in the parliament just behind us.

Humza Yousaf is a Scottish National Party member and Scottish government minister for transport as well. [03:20:00] You've been to a lot of CNN over the last 12 hours, so we

appreciate that. First of all, disappointing night for the SNP.

HUMZA YOUSAF, MEMBER, SCOTTISH NATIONAL PARTY: Well, it's certainly disappointing because you never want to lose M.P.'s particularly of the colleagues (Ph) of Angus Robertson, Alex Hamond M.P.

But while putting that in some context, we still won the election in Scotland 35 seats of 39. We got a majority of seats and far more than any other party, in fact all of the parties combined.

So definitely a mixed night, but the most eminent pressing issue of course is trying to form a government in that place. And certainly the SNP should and could have some influence.

JONES: Why do you think your message was either not received or failed as far as the electorate was concerned?

YOUSAF: Twenty-fifteen was where we won 56 out of 59 seats, 95 percent of seats. I think the election was frankly be balancing itself. So certainly there was a Corbyn resurgence in Scotland, a labour resurgence in Scotland. I think in some other areas of Scotland, the conservatives and the anti-independents vote, Nicola Sturgeon (Ph) the conservatives won candidate and that came to our expense. So I keep there's a couple of lessons there for us to examine and explore.

JONES: You mentioned the independence vote that you, the SNP that is what you stand for, an Independent Scotland. Is that now second referendum off the cards for good?

YOUSAF: No, I don't think that's the case. I do think we should reflect, of course, and reflect as the first minister said, on what our next steps are in terms of a second independence referendum. But it's not the pressing issue.

We have always said that if there was another referendum, that it would be after the terms of Brexit. One of the most pressing issues is trying to form a government in Westminster than the conservatives, I think, should do the decent thing, step aside and allow the progressives to form some sort of alliance.

JONES: It doesn't look like that's going to happen. The word on the street at the moment is that Theresa May is not going to step aside and that she is going to try and form a government to push forward with Brexit and the conservative agenda as well.

You mentioned a progressive alliance. I just had John McDonnell, the shadow chancellor for labour speaking to me. He said no deals. Labour are not going to be striking any deals. Would that be a pre-requisite for the SNP, that if you were going to have any kind of alliance, progressive or not, with labour, it with have to be in a formal coalition deal.

YOUSAF: We weren't going to form a coalition. So I think in that respect, John McDonnell and I are saying the same thing. There would be no formal coalition. What we'd look to do is do an alliance maybe based on an issue by issue basis supporting the queen's speech perhaps, supporting the budgets. All of that and the issue by issue basis.

The conservatives and Theresa May are hinting that she want the same, frankly from what I've seen of her over this election campaign, she will U-turn probably on that because I think the political pressure on her will be huge not just from the public, not from the opposition, frankly from her own party as well.

JONES: Well, where are we with Brexit at this point? If you do form some sort of alliance, progressive with Jeremy Corbyn and Labour Party. Labour have always said that they wanted a soft Brexit as oppose to Tories' hard Brexit. The SNP didn't want any Brexit at all. Most of the Scottish National votes to remain. Where do you stand when it comes to taking that -- those negotiations to Brussels?

YOUSAF: Well, I think there's absolutely no doubt now that after the result that we saw in the early hours of this morning that there is no mandate whatsoever for a hard Brexit. Hard Brexit is now off the table. That is dead. It doesn't exist.

There now has to be access to the single market, exploring that, examining that issue. And of course because we won the election in Scotland, the SNP has to be a part of the negotiating team taking forward those negotiations in Brussels.

JONES: Humza Yousaf, thanks very much for talking to us. We appreciate it.

Max, this is going to be so interesting now, what Brexit means of course. Theresa May, when she first became Prime Minister, she said very explicitly Brexit means Brexit. Since then we've heard of a cold Brexit, a hard Brexit, a soft Brexit. All sort of different types.

Now we're hearing that the hard Brexit that the Tories very much wanted to press forward and that strong sound is coming out of the single market and getting that right deal in their eyes at least for Britain is off the table. It will be a soft Brexit. Whether they can get that agreed within the two-year, less than two-year time scale is another matter altogether.

FOSTER: It's interesting, isn't it? I mean it does sound as though she's going to try and stick it out, in which case behind me she's going to have to speak to the DUP in Northern Ireland where a smaller party that traditionally supports the conservatives but she'll have to perhaps find some sort of agreement with them in order to generally get a working majority which allows her to get votes through parliament.

So we'll wait to hear from her but also the DUP. We've also got just a few votes left to come in from the southwest of England and certainly conservatives will be desperately hoping that those few votes will go their way as well to give them that little edge that they need to continue governing in any sort of positive way. Brexit seemed to be on the minds of many U.K. voters. Earlier, I spoke

to polling expert Marcus Roberts about what these election results mean for those future negotiations with the E.U.

(BEGIN VIDEO CLIP)

[03:24:54] MARCUS ROBERTS, POLITICAL POLLSTER, YOUGOV: There's a big question here, which is can you really do Brexit as a Prime Minister? The most complicated and difficult foreign policy challenge since the Second World War for the government of Britain on a majority of two, maybe three, maybe four when you're dependent upon the votes of a northern Irish party because you, yourself, called an election and failed to win the mandate you, yourself, as Prime Minister said that you absolutely needed.

FOSTER: Well, she certainly can't do the Brexit that she was planning, can she? So she's going to have to step back from the harder Brexit she was looking at and soften it somehow. So that in itself is a U-turn. We can see even more.

ROBERTS: She'll probably be turned in two different directions. One, by also unionists who may want a softer Brexit with regard to the Northern Irish/Irish border to ensure as much trade, commerce, goodwill between Northern Ireland and the rest of the island of Ireland as possible.

And on the other hand, she'll be pulled towards a hard Brexit because her right flank of conservative M.P.'s will absolutely demand their pound of flesh and say they will give no quarter in terms of demanding that tough Brexit. How does she navigate that? How does she navigate on the one hand requirements from some of her M.P.'s and her potential Northern Irish allies for a soft Brexit so that immigration can end and open borders can continue to some extent?

And her right-wing M.P.'s demanding a hard Brexit so that the borders can be controlled and closed so that immigration can be brought down. This was the crux in many ways of the referendum last year, and this is now the crux of her problem as Prime Minister.

FOSTER: She can't manage that, can she? If you bring every together and make a subjective judgment, she can't continue as a powerful leader with all of that in mind. Someone else has to come in behind her surely.

ROBERTS: And who could that possibly be? We may well be in a world in which -- we may well in the world of which the philosopher Paul (Inaudible) used to say to some problems there are no solutions. It may be that she cannot actually effectively govern Brexit through any kind of mathematical arrangement or parliamentary alliance at the moment, in which case what does that do to Brexit as a whole?

Because you will have the opposition parties, the Labour Party, the Scottish Nationalists, the Liberal Democrats all demanding the softest of soft Brexits. Some people may even demand a rethink on the Brexit process as a whole. That probably won't happen, but it won't stop her from having headaches on all fronts. (END VIDEO CLIP)

FOSTER: Well, coming up, we're going to be considering the E.U. reaction to the U.K. election results because it's crucial. This is all about Brexit in the first place if you remember. What the vote mean, could mean for that, coming up.

[03:30:00] (COMMERCIAL BREAK)

FOSTER: Well, we've got just four seats left to declare in this U.K. election. We've got a pretty clear picture obviously of where things stand. But it's important. This is coming down to the wire. These four seats, one in London, three down in the southwest, they are all conservative.

And Theresa May will be desperate to keep them because she needs that extra edge, and she'll also need a smaller party to work with if she's going to continue in government and get any sort of laws through. So no doubt that's going to be DUP in Northern Ireland on that.

As no political party achieve the majority required to gain a full control of parliament. Here's how everything currently stands. You can see the conservatives are ahead but simply not enough. And it's interesting just looking at labor. Obviously they haven't won, but they've done much better than anyone expected. So they've become a much stronger voice and a reform voice, a more left-leaning voice under Jeremy Corbyn's leadership.

A huge setback for the current Prime Minister, Theresa May when she called this snap election, the conservatives already had a majority and were looking at an easy win.

U.K. media now reporting that she's expected -- she's not expected, rather, to resign. And when the campaign started, her main rival, Jeremy Corbyn, didn't even have the full support of his own Labour Party. But party members cheered him as he came into the building just earlier on as he argued the voters have had enough of austerity politics, especially the underfunding of the health service and education, those core services here in the U.K.

Here's how the night played out in the newspapers. Several came out right after the exit polls at 10 p.m. Daily Mail put it this way. "Britain on a knife edge." The Daily Mirror headline, "Hanging by a thread." And the Times says, "May's big gamble fails."

And as the vote count came through the night, the headlines changed. The Daily Mail putting its banner up as a "Gamble that backfired." The Daily Mirror had changed to "Cor Blimey," with the picture of Jeremy Corbyn. And finally the Sun had this gem. "Theresa dismay."

Now media outside the U.K. have been keeping a close eye in this election as well. Let's get more from Tanit Koch, she joins. She is the editor-in-chief of the German newspaper Bild. How do you think Germany is looking in on all of this chaos? I think we can call it that at this point. TANIT KOCH, EDITOR-IN-CHIEF, BILD: Yes, we can definitely call it

chaos or disarray, dismay. I think most Germans will think that a complicated situation has become even more complicated overnight, and who would have thought?

So I'm -- I would love to say that there is no bit of shine spoiled there in Berlin or Brussels. But I'm afraid there is. The general feeling is that the Brits wanted (AUDIO GAP) wanted them to leave or (AUDIO GAP) them to leave but they wanted to leave. (AUDIO GAP)

FOSTER: I can't hear. Sorry about that. I couldn't hear our guest there. But we're going to try and get back to her because we want to get that European view. It's extremely important because Theresa May was trying to increase her majority so she could increase her mandate, her power. And she's actually done the opposite of that and actually she's in a weakened position within Europe.

We can speak to Erin McLaughlin, who is over there in Brussels. And the picture seems to be, Erin, that Theresa May is going to stay in position. And because of the type of character she is, she's probably going to stick to the hard Brexit she was looking at. But her negotiating position is extremely weak now, isn't it?

ERIN MCLAUGHLIN, CORRESPONDENT, CNN: Yes, it certainly seems so, Max. We're hearing a variety of reactions, some aimed at Theresa May, very critical of the British Prime Minister.

Siegfried Mure?an who is the spokesperson for the EPP, which is the main party in European parliament, tweeting out in reference to that spat -- I don't know if you remember between Theresa May as well as the president of the European Commission, Jean-Claude Juncker around the time when Theresa May announced these general elections.

Siegfried Mure?an tweeting "It will be a bloody -- I will be a bloody difficult woman to hash tag Juncker" said May five weeks ago in reference to that spat. Fact is, this morning she looked bloody weak.

So, plenty of people here in Brussels taking note of Prime Minister May's weak position. Many comparing the Conservative Party to a casino, saying that first, Cameron gambled with the future of the United Kingdom by calling the referendum.

[03:35:07] Now Theresa May gambling with the future of the U.K. in calling this general election. We're also hearing from the French E.U. Commissioner, Pierre Moscovisi. He was talking in a radio interview about how this could have a potential impact on negotiations.

He said -- and I'll quote him -- "The outcome of these U.K. elections will have an impact on the spirit of the negotiations and on the political nature of the negotiations, but it won't question the opening of the negotiations on a firm basis but friendly, maintaining the E.U. line that it will be approaching these negotiations on a firm but friendly basis."

A lot of talk here in Brussels as well about the timing of all this. Keep in mind that Theresa May invoked article 50 back in March, and that set forward the two-year timetable.

According to article 50 of the E.U. treaty, these negotiations have to be wrapped up within two years. If they're not wrapped up, the U.K. will be unceremoniously kicked out of the E.U. unless the remaining 27 E.U. member states agree to some sort of extension.

So the clock is ticking. Time is very much of the essence here. It does seem, looking at this scenario, possibly unlikely that the negotiations could start. They were expected to start June 19th. That may have to slide due to the current political situation in the U.K.

FOSTER: Erin, thanks. Let's go back to Tanit Koch, she is the editor- in-chief of the German newspaper Bild. Do you think Britain leaving the E.U. without a deal is more likely because of the result here last night?

KOCH: I can't judge on the British position. The problem is that time is definitely ticking. The lesser to figure our article 50 has been set in March. There's a time set, two years, which we have a new European election in 2019, and it would be absolutely absurd to have a vote for British E.U. members of parliament. The E.U. position is we're ready to negotiate, and we've been ready for months now. And we're just waiting for Britain to get their act together.

FOSTER: We were hearing from a senior member of the Labour Party that this makes, you know, one of the messages coming out from this election was that Britain should try to stay in the single market now rather than go for this very hard Brexit.

I mean, would Angela Merkel and other leaders be open to that idea?

KOCH: Well, Angela Merkel and then most of the European leaders have always said that they want a fair deal and a sensible deal. First of all, they need somebody to actually deal with, so that will be difficult probably in the next couple of weeks.

But they've also made abundantly clear that there will not be access to the single market without freedom of movement, which is something that Theresa May so far, I think, has ruled out. So the general feeling in Germany among German politicians is that neither labour nor the Tories have been completely open to the British public about the costs of a hard Brexit and the cost of Brexit overall.

So maybe facing this new situation, they have to be a bit more detailed about what it actually means to leave the European Union. There definitely won't be a single market access without freedom of movement of some sort.

FOSTER: Theresa have seen Europe but Britain decided to go this way and to leave the European Union. Do you think there's some satisfaction that her negotiating position has been weakened massively by the election result?

KOCH: Well, I think amongst sort of the Brusselites and also among some Berliners, there is a good bit of schadenfreude because obviously Theresa May wanted a stronger mandate and didn't get it. And again the feeling is Britain wants to leave. The Germans didn't want Britain to leave. The E.U. didn't want Britain to leave, and they're neither managing to leave nor to have a proper majority at the moment, a proper mandate.

I think especially the German government is really stressing that they want a stable European Union. That's the absolute priority at the moment. If you look at Angela Merkel and Emmanuel Macron, they're forming a very good relationship right from the beginning, and I think Angela Merkel's priority right now is to help Emmanuel Macron be very successful, and probably Britain has to take second rank to that.

[03:40:08] FOSTER: Britain part of the E.U. obviously still for the next couple of years. But has Britain lost its position on the international stage a bit, not just because of Brexit but now because its leader is so weak as well?

KOCH: I wouldn't say that because as you know, Britain on our security, on a military stance is extremely important internationally. Also when it comes to trade, when it comes to business, it's an important partner of Germany.

But as I said, the priority of the German government is a stable European Union, which will be difficult enough as it is. The German position, Germany may gain more weight due to Brexit, but it won't get more influence because the Mediterranean countries, who are a bit more state interventionist, definitely anti-austerity, will be able to form a stronger majority even.

So the trouble is I think less for Britain on an international basis but for Germany within the European Union, people are often calling for German leadership. But when it comes to German leadership, then immediately there is a criticism of German dominance again.

And if you look at what happened in Eastern Europe at the moment, that crisis is definitely not over yet. I think there's still a couple of challenges, and Brexit and Britain after this election definitely doesn't make things in any way easier.

FOSTER: OK. Tanit Koch from Bild, thank you very much indeed for your European perspective on the U.K. election.

We've also heard from a spokesman from the European commissioning -- commission saying there will not be any delay in the Brexit negotiations. The situation is unclear, though, and they're calling on London for clarity.

We're all looking for that, and we'll bring it to you as we hear from the Prime Minister hear in Downing Street.

(COMMERCIAL BREAK)

FOSTER: Well, the sun has come out here in Downing Street although it doesn't really reflect the atmosphere in the building behind me.

Welcome back. I'm max Foster. You're watching CNN's special coverage of parliamentary elections in the U.K. A shocker of a vote has resulted in a hung parliament. It's an

embarrassing setback for the Prime Minister, Theresa May. Even though she already had a majority government, she chose to call the election to strengthen her hand for those Brexit negotiations. Now her gamble has pretty much backfired.

[03:45:01] Her political future is hanging in the balance as well, but she's not expected to resign according to U.K. media.

This is where the numbers stand right now. Just four more seats to come in, and they are likely to go towards conservatives because they're already with the conservatives and they desperately need that as you can see because under the system here, the main party needs a bigger majority than the one you can see there.

So they're probably going to have to hook up with the DUP, a sympathetic party for the conservatives. At the bottom of that grid you can see they've got 10 seats. That will be very useful, almost crucial for the conservatives to get all three parliaments.

The European Commission doesn't seem inclined to cut the U.K. any sort of a break. It says it stands ready to negotiate a Brexit deal at any time, but there will not be any delay in negotiations.

A spokesperson is asking London to clarify the situation. Mrs. May has suffered a humungous backfire by any measure, her mandate as prime minister has been severely damaged, perhaps irreparably. Because she made it clear that the conservatives will press forward regardless. Take a listen.

(BEGIN VIDEO CLIP)

MAY: As we ran this campaign, we set out to consider the issues that are the key priorities for the British people. Getting the Brexit deal right, ensuring that we both identify and show how we can address the big challenges facing our country, doing what is in the national interest.

That is always what I have tried to do in my time as a member of parliament, and my resolve to do that is the same this morning as it always has been.

As we look ahead and we wait to see what the final results will be, I know that as I say, the country needs a period of stability. And whatever the results are, the Conservative Party will ensure that we fulfill our duty in ensuring that stability so that we can all, as one country, go forward together.

(END VIDEO CLIP)

FOSTER: Well, the opposition leader just saying in the last few minutes, it doesn't look like a strong and stable government. And he's actually saying according to the press association, that they're ready to serve this country, which implies the Labour Party ready to form a minority government. I say that because they're not looking to do any deals or PACS. But at the moment, it looks like the conservative government with DUP support, which is we're waiting to hear from the Prime Minister on that. Corbyn, certainly playing a spoiler in all of this. He had the biggest role in turning the conservatives' dream upside down really. Making strong gains for his party while sealing a gut punch to his biggest rival. He claimed a spiritual victory speaking to supporters earlier.

(BEGIN VIDEO CLIP)

CORBYN: Politics has changed, and politics isn't going back into the box where it was before because what's happened is people have said they've had quite enough of austerity politics. They've had quite enough of cuts in public expenditure, underfunding of our health service, underfunding our schools and our education service and not giving our young people the chance they deserve in our society.

And I am very, very proud of the campaign that my party has run. Our manifesto for the many, not the few, and I'm very proud of the results that are coming in all over the country tonight of people voting for hope, voting for hope for the future and turning their backs on austerity.

(END VIDEO CLIP)

FOSTER: Well, this is a man that many people doubted, Hannah, you're outside parliament, but he's made it through, hasn't he? Now he's talking about forming a government which seems unlikely when you look at the numbers, but you can't exclude anything right now.

JONES: You absolutely can't, Max. A hung parliament does mean that the largest party does tend to get the first crack at the whip in terms of trying to form a government. We've heard from the conservatives and we will hear from Theresa May hopefully later on this morning as to what their plan is going forward, whether they might try and strike some kind of deal with the DUP from Northern Ireland in order to get that working majority within government.

However, labour saying exactly the same thing as well, that they want to form a government. Interestingly, though, they don't want to be doing any deals. You mentioned this earlier as well.

John McDonnell is the shadow chancellor for the Labour Party. He's also one of the key architects of the labour socialist movement, and a close political friend and ally of Jeremy Corbyn, the Labour Party leader. He spoke to me a little bit earlier and fundamentally ruled out any deals. Take a listen to what he had to say.

(BEGIN VIDEO CLIP)

JOHN MCDONNELL, SHADOW CHANCELLOR OF THE EXCHEQUER: We've made it clear all the way along that we're willing to serve the country, we're willing to form a government. It would be a minority government. And the way that would operate is that we'd bring forward a queen's speech and a budget as well, lay it before parliament. I think it would ensure that the policies that we put forward are

based upon those policies that we set out in our manifesto which prove to be extremely popular and would invite M.P'.s to vote for it.

JONES: And what about aside from the austerity measures which you've been against, and that was all laid out as setting your manifesto, what about Brexit because that is just around the corner?

[03:50:02] MCDONNELL: Yes.

JONES: If Jeremy Corbyn is to go to Brussels and to fight on behalf of Britain, what kind of Brexit would you be looking for.

MCDONNELL: Well, it's interesting. I think there's sufficient interest in parliament to ensure that we don't go for a hard Brexit. I think there's common interest in trying to secure access to the single market for tariff free.

But I think also there's a recognition that we have to change the tone of the whole negotiations. This is the point that key star (Ph) and Jeremy Corbyn has been making throughout this campaign. And that means it's a different style of negotiations.

I had an office in Brussels for a period of time in my previous life as a chief executive of the local government association. I don't think Theresa May or the conservatives appreciated the style of negotiations there is one in which you look for mutual interests and you have mutual respect. Banging the table and stomping around doesn't work whatsoever.

JONES: Yes. One of the problems with that is you have quite a tight time period.

(CROSSTALK)

MCDONNELL: Yes, that's right, yes.

JONES: We're already less than two years before we have to have some kind of deal agreed. Theresa May's argument all along has been give me a strong mandate and I will have a strong hand going forward to really fight for Britain. If Jeremy Corbyn's star is much more of a negotiating senses leader so that mean that we could get to this end of two-year process with no deal whatsoever.

MCDONNELL: No deal would be a bad deal. And that was the problem with Theresa May's position. The whole point in the campaign if you like, this general election, is no one really got clarity from Theresa May about what she really -- what her objectives were.

Ours is straightforward. Protection of economy, protection of jobs. Access to the single market, tariff free. And the mutual interest point that I was making is that European -- other Europeans colleagues as well clearly want access to our market. There's a deal to be done here. But the nation's tone of those negotiations I think will set the timetable which will be productive rather than most destructive actually put forward. JONES: The conservatives are going to be the largest party at the

moment. So the onus is on them to try to form a government. If you - if it falls then to labour to try and form a government, the SNP, Nicola Sturgeon has already sort of hinted toward a possible progressive alliance. Is that something that you would work for?

MCDONNELL: No. Let's be clear here. We're not into any deals whatsoever.

(CROSSTALK)

JONES: No deal whatsoever.

MCDONNELL: No deals whatsoever. No coalitions whatsoever either. We'll form a minority government, put our proposal forward, and if other parties want to vote for this proposal, that's fine. That's up to them. But we want to ensure that we form a government that has a clear direction, and that's what we'll give it.

JONES: But that would be stalemate, wouldn't it? If you form a minority government and you just hope that people support you on your key manifesto pledges, that means nothing gets done.

MCDONNELL: No, I think we'll be able to put forth the policies. That will secure majority support within parliament itself because our policies in the manifesto prove to be so popular with the British people.

At the moment what we have is, you know, the Tories may well seek to try and form a coalition with the DUP. I think that would be a real, pardon the expression, coalition of chaos that they accused us of having.

In addition to that, within the Conservative Party now, they're beginning to rip themselves apart. There's a number of Tory M.P.'s already clearly now are saying Theresa May's position is untenable. She's got to go. I think we're going to go through a period in which there's a bruising split in the Tory Party. They'll be incapable of forming a government.

JONES: Well, instead of the party politics putting that aside for a second.

MCDONNELL: Yes.

JONES: Because everyone is trying to work in the national interest. If the Tories do form some sort of government alongside the DUP as well, would you support them in the public interest going forward, would you support them on certain measures?

MCDONNELL: Well, obviously if they seek to form a government like that, we'd have to hold them to account in the same way we would do any government. But at the moment, I don't think they're capable of forming a government, certainly not under Theresa May. I think confidence in Theresa May is now gone.

(END VIDEO CLIP)

JONES: We will wait to see whether the Tories, the Conservative Party, is indeed capable of forming any kind of government. That was the shadow chancellor, labour's john McDonnell speaking to me not long ago.

Labour are saying they are ready to serve the nation. They are ready to start Brexit negotiations, and they're ready to form a minority government. The key thing in that interview with John McConnell, there will be no deals, there will be no deal with smaller parties. All they want is support on key parts of their manifesto, key parts of their pledges on austerity measures and the like from these smaller parties to go forward.

Plenty more reverberations still happening around Westminster as we try to see what kind of government we may indeed get. Don't go anywhere. Plenty more of this special coverage on CNN after this break.

[03:55:00] (COMMERCIAL BREAK)

FOSTER: Welcome back. I'm Max Foster with continuing coverage of the snap election here in the U.K.

The official result is a hung parliament and that's a big problem for the Prime Minister, Theresa May, who called this vote in the first place.

U.K. media saying she's not expected to resign even though some are calling on her to do so. Mrs. May was expected to beat the Labour Party leader, Jeremy Corbyn, hands down and bolster her majority.

In fact, she said that was the whole point of it in the first place. Also to strengthen her hand in impending Brexit negotiations, but that gamble simply backfired leaving her weaker than when she started. This is where the numbers stand right now.

We're still waiting for the last few votes to come in. They are conservative seats. The conservatives need to keep them to retain any sort of mandate in parliament. Already it does look as though they're going to have to work with the DUP. You see at the bottom there.

In order to get through laws through parliament, have a working majority in the parliament. The Labour Party did extremely well, but they did ultimately lose the election. But they got a much bigger voice in parliament now, and the leader there still talking about forming a minority government, ready to serve the country and ready to represent the U.K. in those Brexit negotiations.

He has a very different view from the Prime Minister on that, so justifying Britain's place not just going forward, but also within Europe.

You're watching special coverage of the results of the U.K. election. We'll be back in just one moment.

[04:00:00] (COMMERCIAL BREAK)