A parliamentary election in Greece delivered a second hammer blow to Europe’s political order, with voters flocking to anti-austerity candidates at the expense of the two traditional ruling parties.
The combination of both results was expected to upset markets and increase pressure on the euro as investors today get their first chance to react to the prospect of far-reaching uncertainty in key eurozone countries.
A €105 billion (£90 billion) bail-out deal reached with Europe to save the Greek economy would be thrown into doubt in the weeks of political wrangling expected to follow.
With a high turnout, Mr Sarkozy became the 11th European leader to fall foul of the economic crisis in a catastrophic result for the leadership of a continent beset by economic collapse.
The effects in France were equally as momentous as those in Greece as Mr Sarkozy was ousted from the Elysée after just one term in the worst setback for the centre-Right for over 30 years.
The “silent majority” that Mr Sarkozy repeatedly swore would “submerge” his Socialist rival and all those who predicted he stood no chance, failed to speak up at the 11th hour.
“The French people have made their choice … François Hollande is the president of France and he must be respected,” he said in a speech to supporters.
“I wish him good luck, it’s going to be difficult.”
In a move that will heighten warfare within his party, he said: “I will become a Frenchman among Frenchmen”, adding that he would not lead the centre-Right in forthcoming parliamentary elections.
Exit polls cited by France 2 television gave the Socialist 51.9 per cent of the vote with a turnout of around 81 per cent, as joyful crowds gathered in his rural fiefdom of Tulle and in front of Socialist headquarters in Paris. Mr Hollande was expected to pledge his victory would be a force for change not just in France but in Europe, as he prepared for a political battle with Angela Merkel between her economic doctrine of austerity and his emphasis on state spending to kick start the economy.
The triumphant candidate reacted to his victory by telling supporters he had a mandate to change France.
“On this May 6, the French have just chosen change in bearing me to the office of president,” the 57 year-old told a cheering crowd in his hometown of Tulle, in the rural Corrèze region. “It is the French dream that I will strive to make whole during the mandate that has just been given me.”
Jean-Marc Ayrault, the man who is expected to be France’s next prime minister, said: “We must get out of this austerity in Europe and tonight all our partners in governments around Europe have understood that was the choice of François Hollande to re-orient Europe.”
Up to 100,000 jubilant supporters flocked to Paris’s revolutionary Place de la Bastille, a pilgrimage site for the Left, chanting “François President”.
Many were too young to remember that it was here that a gigantic crowd gathered for the 1981 victory of the last Socialist president, François Mitterrand.
But even as the festivities got under way, officials close to both Mr Hollande and Mr Sarkozy were fearful of a market backlash against the Socialist’s plans to tax the wealthy and expand jobs in the state sector. There are concerns that Mr Hollande will be unable to respect fiscal discipline targets while enacting a tax —and-spend programme that would see him create 60,000 more state education posts, partially revoke a pension reform and slap a 75 per cent tax on millionaire owners.
A senior Conservative source told The Daily Telegraph that fears France was about to reverse course would cause turmoil and uncertainty.
He said: “Clearly it’s going to focus a lot of market attention on the French public finances, which are nothing to write home about. I don’t think it is going to make life in the bond markets any easier next week.
“We haven’t chosen austerity because it’s fun. We have to do austerity, and so does France.
“He will have to be very careful about his public spending commitments and the lack of welfare reform.”
Nobody in France has forgotten the stock market crash after Mr Mitterrand’s election, which saw 17 per cent knocked off the Paris Bourse within a week of his 1981 election.
The French stock exchange dropped almost 3 per cent a fortnight ago, after Mr Hollande won the first round. Socialists last night said they were ready for war if investors seek to punish Mr Hollande for his policies.
Eric Saint-Charles, a Socialist party worker from Créteil, said: “This vote is going to change Europe. The tide is turning against austerity.”
Sergei Stanishev, the president of the European Socialists and a former Bulgarian Prime Minister, pledged that neither markets nor the German Chancellor Angela Merkel would be able to break the new president.
“Democracy comes first. Governments outside France, markets, all international players must respect this,” he said. “The people cannot be held hostage to markets.”
Activists celebrating in Paris, said that the French people would trust Mr Hollande to make reforms, even austerity, “because he would share the benefits equally.”
But some French voters wondered what was in store under a relative untried leader.
“We’re preparing for a crisis, “ said Elodie Vallée. “I am a social worker so I know the problems we’ll have with Hollande. The stock market will take a tumble. And I’m afraid the wealthy job creators will leave”.