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Francois Hollande Wins French Presidency (Update1)

Updated from 3:07 p.m. EDT with comments from Hollande's victory speech.

NEW YORK (TheStreet) -- Socialist Francois Hollande defeated incumbent Nicolas Sarkozy in the French presidential election Sunday.

Sarkozy conceded defeat just minutes after polls closed and said he had called Hollande to wish him "good luck," the Associated Press reported.

The election had turned into a referendum on austerity measures championed by Sarkozy and his close partner, German Chancellor Angela Merkel, as they sought to lead the eurozone out of its debt crisis.

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Hollande's victory likely will change the dynamic between Europe's two largest economies, because he wants more government spending and raised taxes. He also wants to rework a European treaty on budget reduction pushed by Sarkozy and Merkel.

In his victory speech, Hollande said he would be the "president of everyone" and not just the people who voted for him, the AP reported.

"There is just one France ... one single nation, united in the same destiny," Hollande was quoted saying.

Also in his acceptance speech, he said he would cut the nation's budget deficit and maintain the French social model, the AP added.

Crowds gathered at the Place de la Bastille in Paris to celebrate the victory of Hollande, who will be the first leftist president since Francois Mitterand, who served as president from 1981 to 1995, the AP reported.

Meanwhile, Sarkozy thanked his supporters, according to the news agency.

"I take responsibility ... for the defeat," he was quoted saying.

AP Socialist Francois Hollande and his companion Valerie Trierweiler wave as he tours through villages near Tulle, central France, after voting in the second round of the presidential elections, Sunday, May 6, 2012.