After seeing several different interpretations of this movie, we think we've come upon the right one. Even trusted reviewer Roger Ebert agrees, so we'll paraphrase his "pooper" here:
There was never a French daughter at the villa at any time. She (along with her diary, her sex life, the death, etc.) was entirely the creation of the Sarah Morton's (Charlotte Rampling's) imagination. At the very end, we get a glimpse of the publisher's real daughter, much less glamorous and exotic than the figment we've seen throughout the film.
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