Notwithstanding her highly credible performance in the March 2 pre-election debate she lost, quite in keeping with the prevailing trend of ultra-right ascendancy on both sides of the Atlantic. With both the contenders being born after the second world war, the election represented a generational gap between current incumbent Jacques Chirac who is now 74, and Sarkozy who is 52.

Both in Washington and in London Sarkozy has been the hot favourite and the overwhelmingly preferred choice, so that the arc of neoliberal pro-American influence is complete, with him clinching victory. Downing street, unsurprisingly, backed him, as did Silvio Berlusconi, Jose Maria Agner, Angela Merkel, George Bush and the like. Even the Tory leader David Cameron supported him despite personal differences.

The dominant political consensus appears to be that only the right can sort out the political problems of a country. The preferred choice, thus, is either a party of the right or -- as in the case of Tony Blair's government -- a party of the left led by a leader of the right. It is, therefore, no surprise that neo-liberal economic thinking predominates. Tony Blair's New Labour, it may be recalled, enthusiastically embraced the central tenets of Thatcherism by jettisoning its socialist leftist legacy, although, of course, the country enjoyed a prolonged boom.

But it is rather harder to explain the continuing attachment to Americanism at a time when US foreign policy stands discredited. Only two major European nations emerged with credit from the Iraq disaster, without sharing its ignominy. They were France and Germany, which had the courage to withstand the US administration and oppose the US-led invasion.

In 2003, France did the world a service by leading the opposition within the UN, and refusing to allow the body to be used as a tool for Anglo-American policy. It is an irony that the same France, with Sarkozy at the helm, will be under the American thumb.

More fundamentally, however, the choices facing European nations are not just reducible to two obvious issues of neo-liberalism and pro-US foreign policy. Such simplification displays a shriveled view of how politics and political choice have been debased in neo-liberal area. In late 2005, Sarkozy -- then interior minister -- condemned the riots that broke out in the suburbs, where those of African and Arab origin were concentrated, in calculatedly inflammatory terms, displaying zero sympathy for the plight of the ethnic minorities or any willingness to understand their grievances.

The election 2007 in France has been a politically defining moment. Given his reputation as an anti-poor, anti-immigrant politican -- at the centre of Sarkozy's appeal has been race -- he didn't need to bang on about it because at that moment everyone, white and brown, knew where he stood.

As a result of Sarkozy's action he was already hated in the suburb. Under intense pressure, and amid tight security, he eventually visited one such suburb. The suburb, in response, registered and voted -- politically mobilised for the first time and in no doubt about what was at stake in this election.

One of the great themes of post-war Europe has been immigration from the developing world. It has transformed almost exclusively white countries into multi-racial and multi-cultural societies. It has, no doubt, been traumatic and conflictual, but also liberating and educative.

Western Europe is increasingly becoming diversified -- especially France and Britain because of their colonial past. The process is inexorable. The ability of the societies of these two countries to embrace all races and cultures will be crucial to them for their future stability, security and success.

The alternative is the "Sarkozy route," which has all too many parallels elsewhere in Europe -- not least in the Netherlands: repression, ghettoes, gated communities and rampant racism, as well as the exclusion of ethnic minorities from mainstream society -- a form of low-level civil war. Europe's challenges are, therefore, first, to build inclusive, multi-racial societies, and second, to adapt to a world where it is no longer a pre-eminent, but one of the many, centres, and a declining one at that.

The two are closely related. They are far more fundamental to Europe's future than whether or not Sarkozy liberates France's labour market. In the context of a multiracial society, Royal offers inlcusivity and Sarkozy exclusivity. She respects diversity while he preaches nativism. On these grounds alone the choice could hardly be clearer.

For, all said and done, France is at the moment a divided country. It will take all of Sarkozy's skills, and so far unseen compassion, to unite the country. His problems will be compounded if his party fails to a gain majority in the parliamentary election due next month. If that happens it will lead to what is known as cohabitation with the prime minister coming from another party, and weakening the position of the president. This situation occurred several times in the past three decades.

During the campaign, Royal called her opponent "a dangerous leader." Although Sarkozy termed the allegation "outrageous," Royal's warning were not off the mark. The poor in the ghettoes have not forgotten or forgiven Sarkozy's brutal policies, or his contemptuous attitude towards them during the riot last year. Sarkozy has, however, tried to placate those who fear that his presidency will be divisive and confrontational, promising to be the "president of all France." Yet, as an expression of outrage over his electoral triumph, the youth in the suburb engaged in fresh violence.

Brig ( retd) Hafiz is former DG of BIISS.