Hollande sworn in as French president amid Europe’s debt woes

(CNN) — François Hollande promised a new approach to tackling the financial woes plaguing Europe as he was sworn in as president of France on Tuesday.

Hollande becomes France’s first Socialist president since François Mitterrand left office in 1995. He secured election victory earlier this month over the incumbent Nicolas Sarkozy, one of the most U.S.-friendly French presidents in decades.

At an investiture ceremony at the Elysee Palace in Paris, Hollande said he wanted to balance the need to reduce the debts of European governments with efforts to stimulate growth.

Underlining his Socialist credentials, he said he wanted to discourage “exorbitant” incomes. “It’s time to put production ahead of speculation,” he said.

The new president’s approach to France’s economic challenges is likely to reverberate across Europe as the continent wrestles with an unyielding debt crisis.
Inauguration Day in France
Hollande and France’s future
France: New president, same problems
Building through austerity in France

Hollande has unsettled investors with his criticism of the austerity policies central to European bailout deals for troubled economies like Greece and Ireland.

As the leader of the euro zone’s second-largest economy after Germany, his opinion matters. And analysts are waiting to see what kind of relationship he and the German chancellor, Angela Merkel, are able to establish.

In an indication of the urgency of the challenges Europe faces, Hollande will travel to Berlin to meet with Merkel shortly after his inauguration.

Greeted by flag-waving crowds on the street, a steady stream of prominent French figures arrived at the Elysee on Tuesday ahead of the ceremony and walked on a red carpet through the palace’s sun-filled courtyard.

They included the Socialist Party leader Martine Aubry and Bertand Delanoe, the mayor of Paris. Inside the palace, they gathered under ornate chandeliers to witness the transfer of power to Hollande.

The president elect’s car traveled along the tree-lined streets and avenues of Paris, bringing him over the River Seine and past the Grand Palais before pulling up inside the courtyard.

Hollande made his way up the carpet to be met by Sarkozy. The two men, who had fought an at times bitter campaign, shook hands before entering the palace for a meeting behind closed doors.

After they emerged, Sarkozy and his wife, Carla Bruni, left the palace, waving from the car as they were driven away. Hollande, meanwhile, undertook the swearing-in ceremony to become the seventh president of France’s Fifth Republic.

Sarkozy’s partnership with Merkel — dubbed “Merkozy” by some observers — was considered crucial in steering Europe’s currency union away from collapse during the first two years of the debt crisis.

But Hollande’s professed doubts about the fiscal restraint advocated by Merkel, whose party suffered defeat in a vote Sunday in Germany’s largest state, have raised questions about whether Paris and Berlin will continue to read from the same script as the debt crisis continues to unfold.

His election coincided with the vote in Greece that spawned the current political chaos in Athens. That instability has moved Greece closer to the possibility of abandoning the euro, the currency used by it and 16 other European Union countries.

While bracing for the potential tumult from that situation, Hollande will plunge straight into a string of engagements with world leaders.

Major events in the coming days and weeks include a Group of Eight meeting and NATO summit this month followed by a G-20 gathering and a European Council meeting in June.

His approach is expected to make an impact in Afghanistan as well as Turkey and the Middle East.

With Sarkozy, the United States enjoyed support in its positions on Syria, Iran and Afghanistan. Sarkozy was a proponent of the NATO air campaign in Libya.

Hollande, meanwhile, is yet to clearly stake out all of his foreign policy positions.

During the election campaign, he pledged to withdraw all French combat troops from Afghanistan by the end of the year.

He can expect NATO leaders to urge him to change or soften his position when he attends a summit in Chicago this month, the focus of which will be on Afghanistan.

Relations between Turkey and France have been tense because of Sarkozy’s apparent opposition to Turkey’s becoming a member of the European Union. Legislation passed during his presidency that made the denial of the Armenian genocide a crime also raised hackles in Ankara.

Some observers expect Hollande to show slightly more flexibility on Turkey.

Domestically, Hollande has to prove to the French public that he is capable of acting on his promise to bring people together after Sarkozy’s presidency, which often polarized opinion.

Voting in the first round of the presidential election showed large swathes of the population turning to parties on the far left and right of the political spectrum.

That scenario could be repeated in legislative elections to be held next month, where Hollande will hope his Socialist Party can secure a majority in parliament that would allow him to push through his agenda more effectively.