Peter Apps is Reuters global defence correspondent, currently on sabbatical as executive director of PS21

Whoever comes out on top in Britain’s May 7 general election, they will have pledged some very substantial changes.

Prime Minister David Cameron’s ruling Conservatives have promised to renegotiate powers with the European Union and a referendum on Britain’s membership. Opposition Labour leader Ed Miliband says the time has come to turn away from the unfettered power of the markets, promising “mansion taxes” and tighter regulation.

The election looks to be amongst the closest in recent memory. Polls had been little changed for months although recent shifts have left some analysts now expecting Labour to come out ahead. Britain’s two-party system, however, may now be gone forever. Most expect a hung parliament with no party having enough MPs to rule without going into coalition.

That in itself could usher in a period of instability and political paralysis, perhaps another election.

Overall, the campaign has showcased a very different, divided Britain. The focus has been almost entirely domestic — aside from Europe, the rest of the world has rarely been mentioned.

With Britain now a much reduced power — and signalling with its parliamentary vote on Syria in 2013 that it is now much less prone to foreign intervention — the election has so far been largely ignored overseas.

For the U.S. government, much of the focus on Britain rests on persuading it to go back to its defence spending commitment of two percent of gross domestic product. The British defence budget has fallen below that level — theoretically a NATO agreed standard, but one most countries fail to reach — under Cameron. But neither major party has pledged to go back to it.

Britain’s European neighbours are also watching.

A Conservative government dependent on the right-wing UK Independence Party (UKIP) would have little choice but to take a tough line with the European Union, perhaps even bringing forward a referendum on “Brexit” — a British departure.

Cameron, most experts believe, would rather keep Britain in the EU and is hoping to secure just enough reforms to be able to claim a victory that might allow that to happen. Still, some businesses and financial firms have openly threatened to quit the country if it leaves.

Overall, however, polls show most business leaders preferring the Conservatives, a measure of just how much some of Miliband’s rhetoric has upset them.

As seen on mainland Europe, the main battleground has been economic — particularly the future of austerity. As in 2010, the Conservatives broadly favour cutting public spending to reduce the deficit while Labour want to cut back less to preserve growth.

But the gap between the parties may not really be that large. Neither has outlined detailed spending plans. If anything, the most stridently anti-austerity party is the Scottish Nationalists, one of the reasons it looks set to almost sweep the board north of the border.

After its defeat in the Scottish referendum in September last year, the Scottish National Party has pledged not to repeat that vote any time soon. But it has reiterated its opposition to replacing the Trident nuclear deterrent.

In the aftermath of Russia’s actions in Ukraine and with Russian bombers and submarines now routinely probing UK air and maritime borders, that decision now has much greater strategic relevance.

Whichever main party dominates, it will almost certainly find itself dependent on smaller players – the Liberal Democrats, SNP or Greens who want Trident abolished (although the Liberal Democrats are open to an alternative cheaper system). But the simple truth is that both main parties remain committed to it and have enough votes to push it through parliament.

The true importance of the election, then, may be simply what it tells us about 21st-century Britain and politics in general. The two-party divide in Britain in which a single main party invariably ruled seems gone for good. The rise of smaller parties seems to mean coalition governments — almost unheard of in recent history — are the new normal.

The country also looks more sharply divided. In many of its cities, almost no-one votes Conservative. In the countryside, almost nobody votes Labour. And Scotland looks more than ever under the control of an entirely separate political bloc.

What lessons does that have for America? There are certainly stark differences. The U.S. two-party system is much more entrenched, groups like the “Tea Party” tend to exist within the major parties rather than breaking away. In the U.S., social issues — abortion, gay marriage — are much more politicised.

In both, disillusion with politics looks near an all-time high. In the U.S., it’s hard to imagine a repeat of the youthful exuberance that accompanied Barack Obama’s 2008 victory. In 2010, many young British voters turned to the third-party Liberal Democrats only to be hugely disappointed by the concessions they made in government, particularly on university tuition fees. The two main parties remain close to the centre ground — a centre ground that not everyone believes truly still exists.

Both countries are clearly struggling to determine their place in the world, albeit from very different positions.

In both, opposition politicians have been critical of what they call the “failure” of Obama and Cameron in Libya. But foreign policy is simply no longer the focal point it was in the years of George Bush and Tony Blair.

In 1962, U.S. Secretary of State Dean Acheson said Britain had lost its empire and not yet found a role. If the near-total absence of foreign policy in this election is any guide, it may no longer want one.

This article originally appeared on Reuters.com