Hollande triumphs in France

Sarkozy concedes defeat as a Socialist wins the presidency for the first time since 1988.

After 17 years of conservative rule in France, a Socialist is finally heading for the Elysée. The official exit poll for the final round of the presidential election gave François Hollande 52 per cent of the vote, with Nicolas Sarkozy trailing on 48 per cent, the first time a Socialist has won since François Mitterrand in 1988. Much to Sarkozy's dismay (he absurdly accused the pollsters of "lying"), he has become the first French President not to win re-election since Giscard d'Estaing 31 years ago.

In a valedictory address to his supporters, minutes after the polls closed, Sarkozy conceded defeat, declaring that "François Hollande is the President of France and must be respected." It was a rare show of dignity from the UMP candidate, who ran a shamelessly populist and demagogic campaign, pandering to anti-Muslim prejudice at every opportunity.

The implications for British politics are significant. Hollande's call for a more balanced approach to deficit reduction (he has pledged to renegotiate the EU's fiscal compact) and his support for fiscal stimulus finally gives Labour an ally in Europe. In his appearance on The Andrew Marr Show this morning, George Osborne attempted to spin Hollande's victory in the Tories' favour by claiming that he is not "anti-austerity". There is some truth to this. Hollande has pledged to eliminate France's 5.2 per cent deficit by 2017, just a year later than Sarkozy did. The high vote for Left Front candidate Jean-Luc Mélenchon in the first round (11 per cent) showed the desire among some voters for a more radical alternative to austerity.  But the irony is that were Hollande a British politician, his support for higher spending would see him branded a "deficit denier" by Osborne.

We'll hear much talk of how Cameron miscalculated by snubbing Hollande (unlike Ed Miliband) when he visted Britain earlier this year. But the truth is that Hollande was never troubled by Cameron's behaviour. His camp openly said that it was not in their candidate's interests to be seen with a British Conservative and that they understood his support for Sarkozy, the leader of the Tories' French sister party.

Both Labour and the Tories will now anxiously watch the effect of Hollande's policies on the French economy, in search of vindication for their respective strategies.

France's new Socialist President François Hollande waves as he arrives on stage to give a speech in Tulle, southwestern France. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.