* Swing to left comes at a crucial time for Europe
* Hollande beats Sarkozy 51.9 to 48.1 percent-projections
* Sarkozy concedes defeat, congratulates Socialist
* Hollande urges growth measures to temper austerity
* Greek election bombshell overshadows French celebration
(Updates with result projections, Sarkozy quotes)
By Lionel Laurent and Catherine Bremer
PARIS, May 6 (Reuters) – Socialist Francois Hollande swept
to victory in France’s presidential election on Sunday in a
swing to the left at the heart of Europe that could start a
pushback against German-led austerity.
Hollande beat conservative incumbent Nicolas Sarkozy by a
decisive 51.9 percent to 48.1 percent, based on partial results,
bringing the centre-left back to government after a decade in
opposition.
The outgoing president conceded defeat within 20 minutes of
the last polls closing at 8 p.m. (1800 GMT), telling supporters
he had telephoned Hollande to wish him good luck.
“I bear the full responsibility for this defeat,” Sarkozy
said, indicating he would withdraw from frontline politics.
“My place can no longer be the same. My involvement in the
life of my country will be different from now on.”
Punished for his failure to rein in 10 percent unemployment
and for his brash personal style, Sarkozy was the 11th euro zone
leader in succession to be swept from power since the currency
bloc’s debt crisis began in 2009.
Jubilant left-wingers celebrated outside Socialist Party
headquarters and thronged Paris’s Bastille square, where
revellers danced the night away in 1981 when Francois Mitterrand
became France’s only previous directly elected Socialist
president.
But the celebrations may be overshadowed by a political
bombshell in Greece, where mainstream parties were hammered in a
parliamentary election that exit polls suggested may leave
supporters of Athens’ IMF/EU bailout without a majority, raising
doubts about its future in the euro zone.
Hollande’s clear win should give the self-styled “Mr Normal”
the momentum to press German Chancellor Angela Merkel to accept
a policy shift towards fostering growth in Europe to balance the
austerity that has fuelled anger across southern Europe.
His solid margin also positions the Socialists strongly to
win a left-wing majority in parliamentary elections next month,
especially since the anti-immigration National Front is set to
split the right-wing vote and hurt Sarkozy’s UMP party.
If it wins that two-round election on June 10 and 17, the
Socialist Party would hold more levers of power than ever in its
43-year modern history, with the presidency, both houses of
parliament, nearly all regions, and two-thirds of French towns
in its hands.
Even before the results were declared, cheering crowds
gathered at Socialist headquarters to acclaim the party’s first
presidential victory since Mitterrand’s re-election in 1988.
Many waved red flags and some carried roses, the party emblem.
In Bastille square, flashpoint of the 1789 French Revolution
and the left’s traditional rallying point for protests and
celebrations, activists began partying before the final polls
closed and cheered as giant TV screens relayed the results.
Hollande, a mild-mannered career politician, led the race
from start to finish, outlining a comprehensive programme in
January based on raising taxes, especially on high earners, to
finance spending priorities and keep the public deficit capped.
He has vowed to balance France’s budget by 2017, but economists
say he is likely to have to make public spending cuts soon.
As much as his own programme, Hollande benefited from an
anti-Sarkozy mood due to the incumbent’s abrasive personal style
and to anger about the same economic gloom that has swept aside
leaders from Dublin to Lisbon and Athens.
Sarkozy’s supporters consoled themselves with the fact that
the margin could have been worse, preserving their hopes for the
parliamentary elections. “People were talking about an
anti-Sarkozy tsunami,” Foreign Minister Alain Juppe said.
“That’s not what happened.”
SARKOZY NEEDED A MIRACLE
Sarkozy launched his campaign late and swerved hard to the
right between the two rounds of voting as he tried to win back
low-income voters that polls show have ditched him for the
radical left and the far right.
His aggressive rallies and promises to reduce the number of
immigrants, crack down on tax exiles and make the unemployed
retrain to get benefits barely dented Hollande’s lead. Sarkozy
also failed to land a knockout punch in their only television
debate, which polls showed many thought Hollande edged.
In two further blows in the last days of the race, far-right
leader Marine Le Pen, who won 17.9 percent in the first round,
and centrist Francois Bayrou, who polled 9.1 percent, refused to
endorse the conservative president.
Le Pen, who campaigned on a platform of leaving the euro and
restoring trade barriers, vowed to lead “a real opposition that
is ideologically distinct”, predicting that Sarkozy’s UMP party
would implode.
The election comes at a crucial time for the euro zone as
France, Europe’s No. 2 economy, is a vital partner for Berlin.
Hollande, 57, joins a minority of left-wingers in government
in Europe and has vowed to renegotiate a budget discipline
treaty signed by 25 EU leaders in March, to add growth measures.
Berlin has made the pact a pre-condition of aid for struggling
states.
Hollande plans to visit Merkel in Berlin within days of the
election to discuss his ideas and planned to speak to her by
telephone on Sunday evening, said Jean-Marc Ayrault, tipped as a
likely Socialist prime minister.
Merkel herself spent an uncomfortable evening as her
centre-right Christian Democrats looked likely to lose further
local power after a state election in Schleswig-Holstein,
continuing a pattern that may erode her chances of a third term
next year.
While financial markets are warming to Hollande’s growth
agenda, given growing support elsewhere in Europe, analysts say
he would need to reassure investors quickly about his economic
plans as fears resurface over the euro zone’s debt woes.
France is grappling with feeble growth and unemployment at
its highest since 1999, a gaping trade deficit and high state
spending that is straining public finances and was a factor in
Standard & Poor’s downgrading its triple-A credit rating.
French 10-year bond yields fell to 2.87
percent on Friday, a level not seen since early October. Yet
French debt could remain vulnerable to selling pressure, as
markets and credit rating agencies wait to be convinced of his
fiscal credentials.
Economists want Hollande to trim over-optimistic growth
forecasts and impose spending cuts, but political analysts say
this could be difficult with left-wing voters hoping he will
raise the minimum wage and reverse a recent sales-tax rise.
Little known outside France, Hollande will soon have his
diplomatic skills tested at a Chicago NATO summit in late May
and a Group of 20 summit in Mexico in late June. The former
Socialist Party chief has never held a ministerial post.
(Additional reporting by John Irish, Elizabeth Pineau, Morad
Azzouz and Heleen van Geest in Tulle, Ingrid Melander in Athens
and Geert De Clercq; Writing by Daniel Flynn and Catherine
Bremer; Editing by Paul Taylor and Alastair Macdonald)
