May 7 (Bloomberg) -- Nicolas Sarkozy’s defeat in the French presidential election makes him the first incumbent in more than 30 years to fail to win re-election, and the ninth European leader to be booted out since the region’s debt crisis began.
Sanctioned for his flamboyant personal style and slowing economic growth, Sarkozy lost to Socialist Francois Hollande, who got about 52 percent of the vote against 48 percent, polling estimates showed. Sarkozy is the second French president to lose a re-election bid since World War II after former President Valery Giscard d’Estaing was vanquished in 1981.
“After 35 years of politics, after 10 years at the highest levels of government, after five years as head of state, I will become a Frenchman among the French,” Sarkozy said last night, conceding defeat.
With joblessness at a 12-year high and public debt at a record, the electorate proved unwilling to forgive the 57-year-old lawyer for foibles such as celebrating his 2007 victory at a chic Paris restaurant and a holiday on a billionaire’s yacht, making the election an anti-Sarkozy vote.
“If the French had jobs and more money in their pockets, they’d be confident and ready to forgive,” said Laurent Dubois, a professor at the Institute of Political Studies in Paris.
Sarkozy joins a long list of victims of the crisis, which began with subprime mortgages in the U.S. before causing government yields to diverge across Europe. Leaders in Ireland, Portugal, Greece, Italy, Spain, Slovenia, Slovakia and the Netherlands were elbowed out from their posts.
Act Like a King
At the start of his term, Sarkozy, an outsider with immigrant roots, was France’s most popular leader since General Charles de Gaulle, World War II hero and founder of the Fifth Republic. By the time he announced his re-election bid in February, he was the most unpopular incumbent French president since the war and was counting on his stewardship of the debt crisis to deliver a second term.
The dislike of Sarkozy began well before the financial crisis hit France. His approval rating fell to 32 percent by May 2008, a year after his election, from 65 percent a month after his election, pollster TNS Sofres said.
“The French cut the heads off kings, but they also want a king and they want their king to act like a king,” said Fabrice Seiman, co-chief executive officer of Lutetia Capital in Paris, who was once an adviser to the budget minister.
Sarkozy’s unpopularity began the night of his 2007 victory, which he celebrated at Fouquet’s, a fancy restaurant on Paris’s Avenue des Champs Elysees, with about a dozen chief executive officers.
He then went off the coast of Malta on the yacht belonging to one of them, Vincent Bollore.
Next came a public divorce with his wife Cecilia - the first ever by a sitting president - and an even more public courtship with singer-model Carla Bruni, his third wife, including a well-publicized visit to Euro Disney.
He used a presidential press conference Jan. 8, 2008 to announce that his affair with Bruni was “serious.” They were married Feb. 2, 2008 at the Elysee presidential palace.
On Feb. 23, 2008 he was caught on video at an agricultural fair using a vulgar expression against a man who refused to shake his hand.
Sarkozy tried to make amends. In a March 6 television interview, he said he regretted the evening at Fouquet’s and the yachting holiday, saying at the time he was disoriented because of his troubled second marriage.
On RTL radio on April 20, Sarkozy said “the error I committed at the start of my tenure was to not understand the symbolic dimension of the presidency and not acting with enough gravity. I will not make the same mistake because now I understand the role.”
In October, he and Carla went out of their way to ensure that the birth of their baby girl, Giulia, was kept out of the media spotlight.
Sarkozy might have gotten away with his Ray-Ban wearing style and “President Bling-Bling” reputation had the economy not gone into a tailspin, said Dominique Reynie, a senior researcher at Paris’s Institute of Political Studies.
“People were fascinated with him when he arrived at the Elysee in his shorts and running shoes,” he said. “It was refreshing. But when the crisis began it became intolerable, and once the negative image kicked in it was impossible to dislodge.”
Sarkozy campaigned in 2007 promising to create jobs and boost purchasing power. The fallout from the financial crisis hit France through 2008, driving the unemployment rate from a 30-year low of 7.5 percent in early 2008 to almost 10 percent at the end of 2011.
France weathered the economic malaise better than countries such as Spain, where one-in-four people is jobless, and avoided bank bailouts on the scale seen in either the U.K. or Germany.
On Sarkozy’s watch, the French growth slowed to 1.6 percent in 2011 from 2.3 percent in 2007, while the trade gap widened to a record 69.6 billion euros from 42.5 billion euros in the same period. Still, France avoided sliding back into recession, as happened in Britain, Italy and Spain.
Sarkozy pushed through some difficult domestic reforms, increasing the minimum retirement age to 62 from 60, guaranteeing a minimum transport service during strikes and making the running of universities more flexible.
He is also credited with key contributions to organizing support packages for countries such as Greece, Portugal and Ireland, as well as working within the Group of 20 nations to stiffen global financial regulation.
The exit of Sarkozy, who with German Chancellor Angela Merkel, was at the heart of the efforts to resolve the region’s debt crisis, may slow the region’s recovery plan. Sarkozy and Merkel, leaders of Europe’s two largest economies, worked so closely the duo was called “Merkozy.”
“Along with Angela Merkel, Sarkozy saved Europe, but he grates on the nerves of many French,” said Lutecia’s Seiman.
Disagreement between European leaders on how to end the debt crisis and the growing burden of support for euro area members cost France its AAA credit rating for the first time.
Standard & Poor’s stripped France of its top rating by one level on Jan. 13. Sarkozy called it a non-event, saying it “changes nothing” and he has found vindication in the markets.
On the campaign trail, he regularly vaunted a drop in French borrowing costs as a sign of confidence from the financial markets.
France’s benchmark 10-year bond currently yields about 2.8 percent, down from as much as 3.7 percent at the end of November. The equivalent Spanish securities yield 5.7 percent, while German Bunds pay 1.6 percent.
Sarkozy held interior, budget and finance ministry positions before running for president in 2007, while Hollande, also 57, has never held a ministerial post. Members of Sarkozy’s government criticized Hollande’s lack of experience during the campaign, warning it would hurt France’s credibility.
“Experience does matter,” Prime Minister Francois Fillon said during a January visit to Brazil. “That’s why Sarkozy should be re-elected.”
An Ifop poll taken during the April 22 first round showed that 73 percent of Hollande voters voted for the Socialist to punish Sarkozy’s government, much more than the 44 percent who said it was because they agreed with his ideas. The poll involved 3,509 people and no margin of error was given.
Hollande has repeatedly accused Sarkozy’s government of increasing borrowing to fund tax breaks for the rich, swelling the public debt to 1.69 trillion euros, or 85.8 percent of gross domestic product from 64.2 percent in 2007.
Sarkozy announced measures to bolster growth and job creation, including an unpopular increase in the country’s value-added-tax to compensate for cuts in labor charges and the imposition of a financial transaction tax.
Hollande wants to force banks to separate consumer and investment operations and stop awarding stock options to executives. He has promised to tax personal earnings of more that 1 million euros at a rate of 75 percent, to boost France’s minimum wage and add 60,000 public school teachers.
Hollande often made references to Sarkozy’s “behavior” in his campaign speeches and advertised himself as a “normal” person, drawing an implicit contrast with his rival.
Unlike Hollande, Sarkozy isn’t a graduate of France’s elite Ecole Nationale d’Administration. The son of a Hungarian immigrant and grandson of a Jewish immigrant from Salonika, he earned a law degree from Paris X Nanterre university and worked in that profession during the 1980s while also remaining committed to politics.
He’ll be able to resume his career and spend time with his family after saying yesterday that he’ll be quitting politics.
“I’ve always envisaged defeat,” he said in January. “One must always envisage all possibilities.”
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