British voters go to the polls on Thursday in the tightest political race in the UK in a generation. Several opinion polls have indicated the strong possibility of a hung parliament, with a Conservative minority government led by David Cameron as prime minister. In order to guarantee passage of legislation under this scenario, the Conservatives would be forced to negotiate with other political parties, significantly weakening the government’s power. Other polls, concentrating on key marginal seats, have pointed to a small Conservative majority, which would give Cameron, if elected, a far stronger mandate to lead on his own.

Here are five key reasons why the United States and American foreign policy may be directly affected by the outcome of this week’s election in Washington’s closest ally on the world stage.

1. The British Economy

Britain is facing a massive deficit crisis, which the next government will have to deal with. Unless the UK implements huge cuts in public spending, it could eventually face a Greek-style economic meltdown. The U.S. and British economies are closely interlinked through investment stock worth over $800 billion, with about a million American jobs depending on British companies and vice versa. UK direct investment accounts for a fifth of all foreign direct investment in the U.S. A hung parliament this Friday, which is a distinct possibility, would make it significantly more difficult to bring about much needed economic reform in Britain, and would have an immediately negative effect on the world’s two biggest financial markets in London and New York.

2. The “Special Relationship”

Under Gordon Brown and Barack Obama, the Anglo-American “special relationship” has reached its lowest point on a political level since the Suez Crisis of 1956. Rebuilding it will be a priority for a Conservative government, and David Cameron is likely to seek a strong partnership with the White House, even though President Obama has been indifferent, and at times even hostile, towards Britain. It remains to be seen of course whether the Obama administration will shift this stance, which has come under increasing fire in the British media. If Gordon Brown survives as prime minister, there is little likelihood of a recovery in the “special relationship,” with significant tensions and a distinct lack of chemistry between the PM and his U.S. counterpart. If left-wing Liberal leader Nick Clegg plays a role in the next British administration, he will press strongly for a pro-European approach, which downplays the alliance with Washington as well as the broader transatlantic alliance.

3. The War in Afghanistan

Britain has 10,000 troops fighting in Afghanistan, and is the largest contributor to the NATO-led mission after the United States. At present, all three main parties are against an immediate withdrawal of forces, despite strong public opposition to the war. However, a hung parliament with a minority government in place would make a firm long-term commitment to the war a far more difficult proposition for the public. In addition, if the Liberal Democrats have any role or influence in the next government, they are likely to press for a more rapid exit strategy for Afghanistan. It is also important to note that NATO is not even mentioned in the Liberal party manifesto, a clear sign of where their thinking lies on the Afghan mission.

4. The Iranian Nuclear Crisis

The Iranian nuclear threat is likely to be the top foreign policy issue confronting the United States and Great Britain over the next two years. The Conservatives are notably more hawkish than the other major parties on Iran, and have made it clear they will support the use of force if necessary against Iran’s nuclear facilities. David Cameron is likely to seek a prominent leadership role for Britain on the world stage on the Iranian nuclear question. In contrast, the Liberals are adamantly opposed to any military action against Tehran, and have been almost completely silent on the Iranian issue. Prime Minister Gordon Brown has been relatively low key on Iran, unlike his French counterpart Nicolas Sarkozy, and if he remains in Downing Street he is unlikely to play a leading role in addressing the Iranian threat.

5. The War on Terror

The British election will have important implications for the UK’s national security strategy. The Conservatives are likely to back most aspects of the U.S.-led war on terror, and of the three British parties they are by far the most committed to addressing the threat of Islamist terrorism in the UK, which has a direct impact on U.S. national security as well. David Cameron has pledged to outlaw some Islamist groups operating in Britain such as Hitzb ut-Tahrir. On the opposite side of the political spectrum, Nick Clegg is strongly opposed to the war on terror, and has accused his own country of complicity in the “torture” of terror suspects. Neither the Liberals nor Labour have made the fight against terrorism a priority issue in their manifestos, and have almost completely ignored it as a campaign issue. If the Liberals play a key role in the next government, especially on national security, there may be significant, negative implications for Britain’s intelligence services and their ability to collaborate with their American counterparts.

Cross-posted at The Corner.