PARIS -- France handed the presidency Sunday to leftist Francois Hollande, a champion of government stimulus programs who says the state should protect the downtrodden -- a victory that could deal a death blow to the drive for austerity that has been the hallmark of Europe in recent years.
Mild and affable, the president-elect inherits a country deep in debt and divided over how to integrate immigrants while preserving its national identity. Markets will closely watch his initial moves as president.
Hollande portrayed himself as a vehicle for change across Europe.
"In all the capitals there are people who, thanks to us, are hoping, are looking to us and want to finish with austerity," he told exuberant crowds of supporters in a speech early today at Paris' Place de la Bastille. "You are a movement lifting up everywhere in Europe, and perhaps the world."
The party reached into the night on the iconic plaza of the French Revolution, with revelers waving all kinds of flags and climbing the base of its central column. Leftists are overjoyed to have one of their own in power for the first time since Socialist Francois Mitterrand was president from 1981 to 1995.
Hollande narrowly defeated the hard-driving, attention-getting Nicolas Sarkozy, an America-friendly leader who led France through its worst economic troubles since World War II but whose policies and personality proved too bitter for many voters to swallow.
Hollande will take office no later than May 16.
Sarkozy is the latest victim of a wave of voter anger over spending cuts in Europe that has ousted governments and leaders in the past couple of years.
A state election in Germany and local elections in Italy were seen as tests of support for the national governments' policies. In Greece, a parliamentary vote Sunday was seen as critical to the country's prospects for pulling out of a deep financial crisis felt in world markets.
With more than 83 percent of the vote counted, Greece appeared to be heading toward political stalemate. Nobody won enough votes to form a government, and the two parties that backed the bailout -- the conservative New Democracy and socialist PASOK -- conceded they need to win over adversaries to form a viable coalition.
The two parties saw their support plummet to the lowest level since 1974, when Greece emerged from a seven-year dictatorship.
"I understand the rage of the people, but our party will not leave Greece ungoverned," said New Democracy leader Antonis Samaras.
New Democracy was leading with nearly 20 percent of the vote, which would give it 110 seats in the 300-member parliament. PASOK, which has spent 21 years in government since 1981 and stormed to victory with more than 43 percent in 2009, saw its support slashed to about 13.5 percent. It will have just 41 seats, compared to 160 in the last election.
Sunday's other big winner was Alexis Tsipras, the 38-year-old leader of the Radical Left Coalition, or Syriza, who saw his party poised for an unprecedented second place with 16.4 percent and 51 seats -- the first time in nearly 40 years that any party other than New Democracy or PASOK has held the spot.
Voters who deserted the two mainstays of Greek politics in droves headed to a cluster of smaller parties on both the left and right, including the neo-Nazi Golden Dawn. It has been blamed for violent attacks on immigrants and has vowed to "clean up" Greece, calling for land mines to be planted along the country's borders. The party looked set to win about 7 percent of the vote, giving it 21 deputies in parliament -- a stunning rise for a group that earned just 0.29 percent of the vote in 2009.
In France, with 95 percent of the vote counted, official results showed Hollande with 51.6 percent of the vote compared with Sarkozy's 48.4 percent, the Interior Ministry said. The turnout was a strong 81 percent.
"Too many divisions, too many wounds, too many breakdowns and divides have separated our fellow citizens. This is over now," Hollande said in his victory speech, alluding to the divisive Sarkozy presidency. "The foremost duty of the president of the Republic is to unite in order to face the challenges that await us."
Those challenges are legion, and they begin with Europe's debt crisis.
Hollande has said his first act after the election will be to write a letter to other European leaders calling for a renegotiation of a budget-trimming treaty aimed at bringing the continent's economies closer together. Hollande wants to allow for government-funded stimulus programs in hopes of restarting growth, arguing that debts will only get worse if Europe's economies don't start growing again.
Sarkozy and German Chancellor Angela Merkel spearheaded the cost-cutting treaty, and many have worried over potential conflict within the Franco-German "couple" that underpins Europe's post-war unity.
Sarkozy conceded defeat minutes after the polls closed, saying he had called Hollande to wish him "good luck" as the country's new leader.
"I bear responsibility for the defeat," he said. "I committed myself totally, fully, but I didn't succeed in convincing a majority of the French. I didn't succeed in making the values we share win."
Asian stocks began to slide early today after the election results in Greece and France heightened uncertainty about Europe's ability to solve its debt crisis. Japan's Nikkei 225 index plunged 2.5 percent to 9,142.47. Hong Kong's Hang Seng tumbled 2.5 percent to 20,564.87. South Korea's Kospi shed 1.7 percent.