Nicolas Sarkozy has narrowly lost the French presidency after a single term but his Socialist Party successor, Francois Hollande hasn't won a mandate.

There are two more elections to come. The first will be the verdict of the markets and the immediate reaction in Asia was a 1 percent fall in the value of the euro and in Japan a sharp decline in export-dependent stocks.

The markets were already nervous of Hollande's leftist manifesto with a new 75 percent top rate of tax and promises of 150,000 new jobs for young people and 60,000 new schoolteachers. The euro currency is already under pressure and France has lost its precious triple-A status as a trustworthy debtor.

The second election is next month's vote for the French National Assembly. Usually, French voters reinforce their verdict in the presidential election by giving the new president's party a majority. That may not happen this time, since the result was so close. We could well see an uneasy cohabitation of center-left president ruling in tandem with a conservative government and prime minister.

This seems all the more likely because Hollande didn't win Sunday's election so much as Sarkozy lost it. The presidential election turned into a referendum on him, the hyperactive and mercurial former lawyer who promised a "rupture" with France's statist and elitist traditions but then failed in his five years in power to deliver.

This wasn't wholly Sarkozy's fault. He was elected in 2007, in those happy days before the collapse of the U.S. mortgage industry and the bankruptcy of Lehman Brothers.

Sarkozy's presidency became defined by crisis, by a doubling of unemployment and by the endless troubles of the euro.

But Sarkozy's colorful personal life, divorcing while president and then marrying the wealthy model and songstress Carla Bruni, suggested a taste for jet-set glamour and wealth that sat ill with a France sinking into recession.

Francois Hollande has a narrow majority in votes and no great popular enthusiasm behind his leftist manifesto. He won 28.6 percent of the votes in the first round of the elections and 51.7 percent in the runoff. Had the former head of the International Monetary Fund, Dominique Strauss-Kahn, not been arrested and embroiled in a sexual controversy in New York last year, Hollande would never have become his party's standard bearer.

No president of a major country has ever been elected with so little experience of government. A backroom boy in the Socialist Party machine, Hollande has never been a minister and never run anything, except for being chairman of the council of Correze, the most bankrupt and indebted department of France.

Hollande speaks almost no English and has little experience at high levels of international politics. German Chancellor Angela Merkel offered to campaign for Sarkozy against him. British Prime Minister David Cameron found himself otherwise engaged when Hollande visited London. U.S. President Barack Obama, who meets Hollande for the first time at a NATO summit in Chicago this month, is bracing for a difficult encounter since Hollande is pledged to withdraw all French troops from Afghanistan by the end of this year.

In Europe, Hollande threatens to be a divisive figure, after promising to challenge the fiscal responsibility pact that Merkel imposed on her eurozone partners as the price of German support in the euro crisis. Hollande wants the German-led austerity softened with a new pledge to focus on restoring growth.

Europe has yet to see what he means by this. His own plan for France appears to mean more government spending to produce more state jobs, paid for by higher taxes on business and the wealthy. If Hollande can soften this leftist line with a focus on infrastructure spending, training and labor market reform, he may be able to win Merkel's acquiescence.

Left to himself, Hollande wouldn't be so radical. He comes from the small-c conservative background of a prosperous Catholic family in western France. His first political patron was Jacques Delors, a moderate Christian Social-Democrat who was one of the European Union's most successful presidents. And Hollande was himself backed in these elections by the former Gaullist President Jacques Chirac.

But Hollande has political debts to pay to labor unions and the hard left. Europe could face difficult months of squabbling, since the eurozone never works well when France and Germany are at odds.

France's future course will be unknown until the new National Assembly is elected and, now that Sarkozy is retiring into private life, French conservatives are leaderless. Marine Le Pen, leader of the populist an anti-immigrant National Front, who won 18 percent of the vote in the first round, is poised to win seats and take advantage of the disarray on the right. French politics could look very different if she forces a split on the right or if she negotiates an electoral pact with Sarkozy's old UMP party.

It was the French monarch Louis XV, speaking 20 years before the French Revolution of 1789, who warned what would come next: "Apres moi, le deluge." -- "After me, the deluge." It may give him little satisfaction but Sarkozy could be forgiven for thinking along similar lines on this bitter morning of defeat.