BYE BYE SARKOZYYYYYYYYYY

France says 'au revoir' to the Sarkos as Francois Hollande is sworn in as the new President... while stylish Valerie eclipses frumpy Carla at Elysee Palace handover

Francois Hollande was this morning sworn in as the new Socialist President of France - before getting drenched on an embarrassing open-topped drive up the Champs Elysee.

The 57-year-old was inaugurated in a simple ceremony at the Elysee Palace in Paris, nine days after defeating the conservative Nicolas Sarkozy in a nationwide election. But it was during his 'triumphant' drive up France's most famous avenue that everything started to go wrong.

As he poked his head out of the sunroof of a Citroen DS5, heavy rain started to pour, and there was no effort made to pull back the sunroof.

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Salute: France's new president Francois Hollande braved the rain to wave to the crowds as he paraded down the Champs-Elysee

Adapted: Francois Hollande was greeted by hundreds of cheering crowds as he made his way through Paris

Honoured: Flanked by a motorcade, France's president Francois Hollande paraded through the capital's streets

French President-elect Francois Hollande's companion Valerie Trierweiler, right, shakes hands with outgoing President Nicolas Sarkozy's wife Carla Bruni-Sarkozy

It meant that the seventh president of France's Fifth Republic - a man holding the second most powerful executive position on earth after the U.S. president - was soon soaking wet.

'He looks like he has been swimming in his suit,' said Genevieve Bernard, a 22-year-old Socialist Party activist who was among those lining the Champs Elysee. 'It is so sad, because today should be a day of triumphant for Mr Hollande. He has so much to offer the country, but the drive was embarrassing.'

Hollande intends to reform France by increasing taxes by up to 75 per cent, and by pouring millions into public services. His left-wing agenda saw Mr Sarkozy warn that
But today Mr Sarkozy was left to exit the Elysee with his former supermodel wife, Carla Bruni-Sarkozy, who was decidedly trumped in the style stakes by Hollande's partner Valérie Trierweiler.
The pair looked subdued and tired as they marched up a red carpet hand-in-hand and clambered into a waiting car.

Ms Bruni-Sarkozy, who has pledged to revive her career as a pop singer, was wearing a black trouser suit and the now trademark pumps which she wears to reduce the five inch height difference between her and Mr Sarkozy.

Expectation: The crowd gathered in France's presidential palace to see Francois Hollande's investiture as leader

It's official! Francois Hollande is awarded 'Grand Maitre' in the Order of the Legion of Honour from General Jean-Louis Georgelin

Lonely walk away: Former France's president Nicolas Sarkozy and his wife Carla Bruni-Sarkozy leave the Elysee presidential Palace

One last smile: Outgoing French President Nicolas Sarkozy and former First Lady Carla Bruni Sarkozy making the long walk away from power

Farewell: The Sarkozys bid goodbye to the presidential palace as Nicolas enjoys his final morning in power

Au revoir: French President Francois Hollande (left) looks at outgoing president Nicolas Sarkozy (centre) and his wife Carla Bruni-Sarkozy leaving the presidential Elysee Palace

Out with the old, in with the new: Outgoing French President Nicolas Sarkozy and wife Carla Bruni-Sarkozy leave the Elysee Palace as President Francois Hollande and companion Valerie Trierweiler look on

NO DOUBLE DIP RECESSION FOR GERMANY OR FRANCE

France and Germany have avoided plunging into a double dip recession - posting stagnant and minor growth respectively.
France's economy did not grow in the first quarter of the year with GDP the same from January to March.
National statistics agency Insee also revised down growth in the fourth quarter of last year from 0.2 per cent to 0.1 per cent. Some analysts expect GDP to start contracting next quarter.
Over in Germany, GDP grew a surprising 0.5 per cent in the first quarter, well ahead of a consensus forecast, as exports helped the economy bounce back from a contraction of 0.2 per cent in the fourth quarter.    
Preliminary data released today also showed that growth compared to the same quarter a year earlier accelerated to 1.7 per cent from 1.5 per cent in the fourth quarter, giving hope to the ailing eurozone that Germany can remain a motor for growth.    
Exports above all drove growth and domestic consumption also gained pace, helping offset a decline in investment.   

On being sworn in, Mr Hollande, France's first Socialist head of state for 17 years, immediately turned his attention to Europe, urging others to reform the European 'fiscal pact'.

'I will propose to my European partners a pact that ties the necessary reduction of deficit to the indispensable stimulation of the economy,' said Mr Hollande. 

His attentions will now turn to showdown talks with his German counterpart Angela Merkel in Berlin, to where he will fly later today.

In a bid to calm global financial markets, which yesterday hit a four-month low and saw £28.5billion wiped off the FTSE-100 over rising fears Greece could soon exit the single currency, he will try to renegotiate the EU's currently austere fiscal treaty to include growth measures.

His plan is in stark contrast to Merkel's and experts say the fate of the eurozone may rest on whether they can reach a compromise.

Hollande will give his first presidential news conference in Berlin this evening, with his first words as president keenly watched by financial markets eager for reassurance. Europe's financial markets are currently relatively stable, despite yesterday's cataclysmic events.

The FTSE-100 is 0.02 per cent up at 5,466.64; Germany's DAX is 1.26 per cent up at 6,453.23; while France's CAC 40 is 0.72 per cent up at 3,079.96.

Germanophile Jean-Marc Ayrault, who has strong contacts in Berlin, could be named prime minister later in the day. Outgoing leader Nicolas Sarkozy has already gone through the ritual of entrusting his successor with nuclear codes and other secret dossiers.

Hollande will eat his first lunch as president with Socialist former prime ministers Pierre Mauroy, Laurent Fabius, Michel Rocard, Edith Cresson and Lionel Jospin.   

The German-French relationship has been at the core of negotiations on how to dig out of the crisis, touched off by ballooning debts that have made investors reluctant to lend to some countries.

Because the rates to borrow money went so high for Greece, Ireland and Portugal, they were forced to ask for bailouts to pay their expenses. Some fear Italy and Spain - with far larger economies - could soon find themselves in the same position.

As the eurozone's two largest economies, and thus the primary contributors to those bailouts, France and Germany have mostly been allowed to set the new rules the bloc will abide by to ensure it never descends into a similar crisis again.

But, in reality, France and Germany often differed on the eurozone's course, with Germany the more steadfast proponent of budget discipline. France, after all, hasn't balanced its budget in more than three decades.

'We don't think the same thing on everything,' Hollande said yesterday on France-2 television. 'We will acknowledge that, in order to find the right compromise.'

One in, one out: France's outgoing President Nicolas Sarkozy (left) welcomes his successor Francois Hollande (right) upon his arrival at the Elysee Palace for the formal handover of power ceremony

Couples together: France's outgoing President Nicolas Sarkozy shakes hands with newly-elected President Francois Hollande as their partners look on

Warm welcome: Nicolas Sarkozy (left) shakes Francois Hollande's (right) hand as they meet in front of the Elysee Palace in Paris

Historic: France's President Francois Hollande (right) walks on the red carpet towards his predecessor Nicolas Sarkozy (left) prior to the start of his investiture ceremony

Hollande's predecessor, Nicolas Sarkozy, and Merkel were said to be so tight they were referred to as one person, Merkozy. Many now wonder what type of relationship Hollande and Merkel will have, especially since she backed Sarkozy over Hollande.

Hollande emphasised yesterday that he and Merkel would be speaking frankly about what each thinks 'not of the other but - of the future of Europe'. That seemed to dismiss talk about whether they would get along swimmingly. Many analysts say Hollande and Merkel will find a way to get along because they have to.

Hollande will get a grand welcome in Berlin with military honours and dinner on the eighth floor of the Chancellery, which offers scenic views over the Tiergarten park and Reichstag. Tonight, the two leaders are expected to discuss the broad outlines of a new 'growth pact' to complement Merkel's 'fiscal compact' on budget discipline.         

'Admittedly, Mr Hollande has adopted a sharp tone ahead of his meeting with Mrs Merkel later this week, but that is probably because, having presented himself as an emollient personality, he does not want to appear weak in international negotiations,' said Stephen Lewis, an analyst with Monument Securities.

Ceremonial: The sweeping views over the top of the presidential Elysee Palace in Paris

Expectant: Francois Hollande will become France's new President today at the Elysee Palace

Preparations: Photographers watch a man sweeping the Elysee Palace red carpet (left) as Paris' Socialist Mayor Bertrand Delanoe (right) arrives

Parade: France's Republican Guard march outside the Elysee Palace before the hand-over ceremony

ARE MERKOLLANDE ACTUALLY TWO PEAS FROM THE SAME POD?

When Nicolas Sarkozy took power nearly two years into Angela Merkel's first term, they seemed a perfect match.
Both were conservatives who favoured closer ties with Washington, opposed Turkey's bid to join the EU and wanted reforms of the welfare state.    
But the German leader may have more in common with Francois Hollande in the areas that really count.          
The two were born less than a month apart in the summer of 1954 and grew up in religious households with distant fathers and mothers they were close to.      
Both have simple tastes. When she became chancellor in 2005, Merkel insisted on staying in the modest apartment opposite Berlin's Pergamon Museum where she still lives with her husband.           
Hollande has complained about having to move into the Elysee Palace from his flat in Paris's 15th arrondissement, and said he wants to continue to take the train and do the family shopping as head of state.   
Merkel's Social Democrat predecessor Gerhard Schroeder was known for his expensive Italian suits, and Sarkozy as 'President bling bling' for his flashy lifestyle, but neither Hollande nor the German leader are fussed about fashion.      
Both required a thorough makeover when they ran for office - Hollande going on a diet and trading in his round spectacles for designer frames, and Merkel getting a brand-new hair-do and wardrobe.
Their down-to-earth simplicity is one reason voters backed them over more charismatic incumbents.

Hollande campaigned like a traditional Socialist. He took aim at the banking system, promised a 75 per cent tax on high earners and vowed to renegotiate a European treaty meant to limit overspending that had become synonymous with 'austerity' - measures taken to cut spending that have severely hurt social benefits.

But there's reason to believe that Hollande will govern more pragmatically.

He has said he will order an audit of France's bank accounts before he embarks on any of his campaign promises, leaving himself an opening to scale them back.

He has also promised to reduce France's considerable debts, committing to balancing the books just one year later than Sarkozy had aimed for.

Most importantly, while he says he will insist on a re-negotiation of the 'fiscal compact' to add growth-promoting measures, his language leaves some room to maneuver.

At one press conference, he indicated that the growth protocol could come in a separate treaty.

Given the reality of a new French leader, Germany appears prepared to soften its position.

Merkel and her government maintain that the fiscal treaty, which threatens sanctions for countries that spend beyond their means, is not up for negotiation and must be respected.

But officials there have also begun to talk about the need to encourage growth.

Whereas just a few months ago, it seemed only economists were talking about the need to spur growth, Hollande has brought that issue to the center of Europe's conversation about its crisis.

Politicians around the region are clamoring for more help from the EU, and European Central Bank President Mario Draghi has called for a 'growth compact'.

Just yesterday, Germany's finance minister wrote in an essay in French newspaper Les Echos that 'Germany says 'yes' to growth'.

'The idea for a growth initiative is not only legitimate, it is in line with Germany's wishes,' wrote Wolfgang Schaeuble.

But he quickly moved to quash the idea that Germany was ready for increased spending. 'By growth, I obviously don't mean the artificial stimulation of demand by budgetary spending,' he wrote.

Merkel's spokesman yesterday laid out exactly how Germany envisions stimulating growth.

'Growth is the result of smart reform policy, reducing bureaucracy, support for small and medium-sized companies, measures in the area of education and training, and above all labor market reforms,' Steffen Seibert said in Berlin.

'Growth can also be supported ... by the targeted and smart use of European funds that haven't yet been spent.'

Many of those proposals are straight from Hollande's playbook. But others, like structural reforms, it's not yet clear how far Hollande will be willing to go.

Economists say France desperately needs to make it easier for employers to hire and fire and reduce the amount they pay into the social benefit system.

But those reforms will involve a major shake-up and will likely be fiercely resisted by labor unions.

'For the Germans, the return to economic dynamism has to pass through major structural reforms.... That's, after all, the strategy that was put in place across the Rhine 10 years ago,' said Marc Touati, chief economist at the of investment company Assya.

'Only, all Europeans are not Germans and are not necessarily ready to put up with the German cure.'

Motorcade: The car carrying France's newly-elected President Francois Hollande pictured arriving at the Elysee Palace this morning