Hollande elected next president of France

"Austerity can no longer be an inevitability in Europe," he said, alluding to the on-going European discussion about the merits of constant economic belt-tightening.

After a bitterly-fought campaign characterised by a strong level of personal animosity between Hollande and the centre-right incumbent Nicolas Sarkozy, the low-key winner inherits something of a poisoned chalice.

Growth in France is forecast for 0.5 percent in 2012 while unemployment is at almost 10 percent, a 12-year high. Hollande ran his campaign on an anti-austerity platform but has still promised to balance the budget books by 2017.

In a TV duel watched by around 17 million people on Wednesday evening, Hollande raised the stakes for himself by repeatedly attacking Sarkozy's "failed" record on unemployment reduction.

He promised to be a more unifying president in contrast to the frenetic and at times abrasive style of Nicolas Sarkozy.

Hollande, who has never held a ministerial post, has also promised to cap petrol prices, create 60,000 teaching jobs, impose a 75 percent tax on the super-rich and establish a Public Investment Bank to fund new projects.

As far as the rest of Europe is concerned, one of the most pertinent issues is what exactly Hollande means when he says he wants to renegotiate the Germany-driven fiscal compact treaty - a short document signed early this year by 25 member states enshrining balanced budgets into national law.

The 57-year old socialist says he wants to include more growth elements in the text, which focusses only on budget rigour.

For political aficionados, relations between German Chancellor Angela Merkel and Hollande will be a must-see. The president-elect distanced himself from Germany's economic vision for Europe early on in the campaign. Merkel returned the political favour by refusing to meet him in Berlin and openly campaigning for her centre-right colleague Sarkozy.

Jean-Marc Ayrault, a close aide to the president-elect, indicated that Hollande would be in contact with Berlin already on Sunday evening.

Hollande's win represents a boost for the left in Europe which has been frustrated by it inability to politically capitalise on the financial crisis but the EU remains dominated by the right.

As for Sarkozy himself, he is the first one-term president since 1981. He has previously indicated that he would leave politics if not re-elected and dismissed out of hand an EU job implying he has too big an ego to be the consensus-builder needed for the European Council president and that the European Commission president job is beneath him.