In the end, Nicolas Sarkozy was not so far from achieving an upset victory at the last moment. Two months ago, he was losing in the polls by a two-digit margin and finally last night, he had managed to narrow it down to less than four percent. The March terror attacks in Toulouse and the temporary shift of the electoral agenda to issues of immigration and cohesion gave an opening to Monsieur Sécurité, but it was simply not enough. President Bling had come up against an immovable barrier of derision and loathing. It isn’t so much that mild-mannered Mr. Normal Francois Hollande captured the imagination of the voters - too many of them just could not bear to see Sarkozy on their television screens and in the Élysée for even one more day.

The socialists are back in power after seventeen years but they could hardly wish for a less auspicious set of circumstances for themselves. The nation Hollande now leads is fractured and muddled – the fact that his party's traditional voters, the working class, gave more votes to Marine Le Pen's far-right Front National in the first round of voting should serve as a severe warning that the expectations of the French masses have been drastically let down.

Hollande has promised his compatriots he would defy the current trend of austerity being preached in the other capitals of Europe. His generous spending plans which will cost at least 20 billion Euros (according to his calculations) include hiring 60 thousand new teachers, fly in the face of a bleak fiscal reality. France already spends more of its GDP on welfare (28.4%) than any other developed country and its debt-to-GDP ratio is set to reach 90% this year. While a similar financial crisis in France such as Spain is currently undergoing still seems inconceivable, the new French government may be forced very soon to renege on some of its more outlandish election promises.

The new government will also face some very hard decisions on the future of its relationship with the European Union and especially with its partner in leading Europe - Germany. Hollande will have some tough talks already this week with Chancellor Angela Merkel on his reservations regarding the new tight fiscal restraints Germany has imposed on the Eurozone. If they fail to reach an agreement, and Merkel is unlikely to back down, the joint currency could be back at the brink of meltdown in a matter of weeks. Hollande though may be magnanimous in victory, after all Sarkozy's remarks earlier this year that France should be more like Germany, and the close relationship he enjoyed with the Chancellor, probably helped Hollande, in his quiet way, capitalize on the hurt feelings of many French voters.

Sarkozy will be missed in Israel where he was always seen as a friendly president without too many demands. French expatriates in Israel voted for him overwhelmingly in the first round (81 percent). The leader of the CRIF, Richard Prasquier, expressed concerns that some of Hollande's left-wing allies would use their new ruling position to mobilize sentiments against Israel. Considering the problems the new government is facing closer to home, it is a safe bet that Israel will not be very high on their agenda any time soon.

The failure of the moderate-right to hold on to the reins of power and Sarkozy's departure from the political arena leaves the door open to a much more sinister nationalist opposition. Marine Le Pen can claim to have succeeded in some degree to detoxify the NF brand, and she will mount a battle to take the fallen mantle of leader of the right. If Sarkozy stays around long enough to anoint a credible successor, he will have done France a greater service than anything he achieved during his single-term presidency.