Madrid (CNN) -- Flanked by his family and before Spain's Parliament, Felipe VI was formally proclaimed the new King of Spain Thursday, following the abdication of his father, Juan Carlos. 
 
 The new King, clad in military uniform, promised to head a changed monarchy "for new times," in an address before the packed parliamentary chamber. 
 
 "We have a great country, we are a great nation -- let us trust in it," he told the packed parliamentary chamber and the millions watching nationwide. 
 
 After swearing an oath promising to uphold the constitution, the new monarch expressed his respect for the Parliament and the nation -- as well as his own emotion at becoming monarch. 
 
 Felipe paid tribute to his father's "extraordinary" legacy over nearly four decades, including his leadership as the country returned to democracy following the death of dictator Francisco Franco in 1975. 
 
 He also thanked his mother, Queen Sofia, for a lifetime of hard work and devotion to the Spanish people. 
 
 Felipe spoke of the need for a monarch to unify his country and to work with its political leaders, a message with added significance at a time when many in the country's Catalonia region want a referendum on independence. 
 
 He also vowed to carry out his duties, remain loyal to his nation and work for the interests of Spain. "I will honor the pledge and the oath I have just taken," he said. 
 
 The head of state must set an example of honest and transparent behavior, he said, perhaps a reflection of the scandals that have beset the monarchy in recent times. 
 
 Felipe reflected on the country's recent economic woes, which have fueled high unemployment rates. But he also spoke of the need for its people, at a time of adversity, to "look ahead to the Spain we are building together as I begin this reign." 
 
 This, he said, will mean modernizing to meet the challenges of a globalized world. 
 
 The proclamation ceremony is a more subdued affair than a coronation, without the pomp of foreign dignitaries and elaborate ceremonies. 
 
 But crowds cheered loudly as Felipe, his wife, now Queen Letizia, and their two daughters emerged onto the balcony of the royal palace, joined by Juan Carlos and Sofia, to salute the Spanish people. 
 
 Chants of "Long live the king" rang out in Spanish. 
 
 Felipe's elder daughter, Leonor, 8, becomes Princess of Asturias, first in line to the throne. 
 
 Retirements of monarchs 
 
 Stroke of pen 
 
 His father's 39-year reign had come to an end with the stroke of a pen and the stroke of midnight Wednesday. 
 
 Less than three weeks after he announced his surprise abdication, longtime leader Juan Carlos signed the step into law at the royal palace in Madrid, making his son the new king. 
 
 In another ceremony held Thursday morning to mark the transfer of power, Juan Carlos took off the red sash signifying his role as head of Spain's military, fastening it around his son's waist. 
 
 Crowds lined up waving the red and yellow Spanish flags as military bands marched in the streets of Madrid. 
 
 Juan Carlos has said Felipe, a former Olympic yachtsman, has "the maturity, the preparation and the sense of responsibility necessary" to serve as king and "to lead to a new stage of hope using his experience and the drive of a new generation." 
 
 The new King is regarded as being untouched by the accusations of corruption and excess that have plagued the royal family as many Spaniards continue to struggle to find jobs and pull themselves out of financial ruin. 
 
 At his side will be the new Queen Letizia, who before she married into the royal family worked as a TV presenter. 
 
 Princess Cristina, the new King's older sister, is embroiled in a tax fraud and money-laundering investigation. She and her husband, Inaki Urdangarin, have denied allegations that they diverted public funds from Urdangarin's foundation for private use. 
 
 Spaniards have long held Juan Carlos, 76, in high regard for shepherding the country into democracy. 
 
 But his popularity took a hit in 2012 over a controversial elephant-hunting trip to Africa while the nation was mired in a deep economic crisis. 
 
 Some Spaniards have called for the monarchy to be abandoned, favoring the establishment of a republic instead. 
 
 The anti-monarchy movement has been fueled by the scandals that have hit the royal family in recent years. 
 
 The biggest task for Felipe, 46, will be to make the dealings of the royal palace more transparent. His family has a relatively austere reputation compared with other European monarchies, but there has been increasing resentment in Spain over the cost of the royal family to the public. 
 
 READ: The sailor who will take the helm in Spain 
 
 CNN's Al Goodman reported from Madrid, while Laura Smith-Spark wrote in London and Steve Almasy in Atlanta. ||||| MADRID (AP) — Crown Prince Felipe ascended to the Spanish throne at midnight Wednesday, but there weren't any ritzy official celebrations. 
 
 Spain’s King Juan Carlos, 2nd left is kissed by Queen Sofia, left in the presence of Spain's Crown Prince Felipe, 3rd left and Princess Letizia after he signed an abdication law during a ceremony at the... (Associated Press) 
 
 Spain’s King Juan Carlos, left, signs an abdication law in the presence of Queen Sofia, Spain's Crown Prince Felipe and Princess Letizia during a ceremony at the Royal Palace in Madrid, Spain, Wednesday... (Associated Press) 
 
 Spain's Queen Sofia, left stands with Spanish Crown Prince Felipe, 2nd left, King Juan Carlos, 3rd left, and Princess Letizia during a ceremony at the Royal Palace in Madrid, Spain, Wednesday June 18,... (Associated Press) 
 
 Spain's Crown Prince Felipe, centre right , embraces his father, Spain’s King Juan Carlos in the presence of Queen Sofia, left and Princess Letizia after he signed an abdication law during a ceremony... (Associated Press) 
 
 Queen Sofia, left, Spain’s King Juan Carlos, 2nd left, Spain's Crown Prince Felipe, 3rd left and Princess Letizia stand during a ceremony where King Juan Carlos signed an abdication law at the Royal... (Associated Press) 
 
 Prime Minister Mariano Rajoy, left shakes hands with Spain’s King Juan Carlos after he signed an abdication law during a ceremony at the Royal Palace in Madrid, Spain, Wednesday June 18, 2014. Spain’s... (Associated Press) 
 
 Spain's Crown Prince Felipe, right , embraces his father, Spain’s King Juan Carlos after he signed an abdication law during a ceremony at the Royal Palace in Madrid, Spain, Wednesday June 18, 2014. Spain’s... (Associated Press) 
 
 Spain’s King Juan Carlos, left, signs an abdication law in the presence of Queen Sofia during a ceremony at the Royal Palace in Madrid, Spain, Wednesday June 18, 2014. Spain’s Juan Carlos formally ratified... (Associated Press) 
 
 The economic crisis that has left a quarter of Spaniards out of work prompted Europe's newest king to be relatively frugal at his proclamation. 
 
 The crown prince's father, 76-year-old Juan Carlos, misjudged public anger at financial hardship when he went on an elephant-hunting safari in Africa. Felipe, 46, appears keen to show he's more in tune with his countrymen — and avoid the mistakes of his abdicating predecessor. 
 
 The landmark occasion was perhaps most notable for what it didn't include: no state banquet, no foreign royals or heads of state, no ostentatious ceremonies or parades. 
 
 By royal standards, it was humble: reception guests were being served hot and cold tapas-style nibbles, to be eaten while standing. There was no champagne, just sparkling cava wine from Spain's Catalonia region. 
 
 "More than anything this is a message. What they want to say is: 'We're in a moment when sobriety in spending shows a certain sense of solidarity in a time of economic difficulty,'" Navarra University history professor Pablo Perez Lopez said. 
 
 Juan Carlos on Wednesday signed legislation, approved by Parliament earlier this month, setting out the legal framework for the handover. The retiring monarch, who underwent a hip replacement operation last November, used a walking cane and moved with difficulty during the televised signing ceremony. 
 
 Prime Minister Mariano Rajoy immediately ratified the law, which went into force at midnight in Spain (2200 GMT). 
 
 Felipe is to be formally proclaimed monarch and swear an oath at a ceremony with lawmakers in Parliament on Thursday. It will be a no-frills event, though the 18th-century Spanish crown and 17th-century scepter will be on display. 
 
 After a brief military parade, King Felipe VI and Queen Letizia will take a drive through expected crowds along some of Madrid's most emblematic streets and monuments — such as the Prado Museum and the Cibeles fountain. 
 
 The palace acknowledged that the customary pomp had been eliminated "in keeping with the criteria of austerity that the times recommend." 
 
 The reasoning behind that choice is easy to understand, says Emilio de Diego Garcia, history professor at Madrid's Complutense University. 
 
 "In a time when every expense is examined with a magnifying glass, particularly public money, any ostentation would have been criticized," he said. 
 
 Juan Carlos announced his surprise decision to abdicate on June 2, saying he was stepping aside after a four-decade reign to allow for younger royal blood to rally the country that is still trying to shrug off a double-dip recession and a 26 percent jobless rate. 
 
 During most of his reign, the monarch was held in high esteem for his role in helping steer the country from military dictatorship to democracy. He took over the throne in 1975, two days after the death of longtime dictator Gen. Francisco Franco, and then endeared himself to many by making army rebels stand down during an attempted military coup in 1981. 
 
 More recently, however, the royal family's image was tarnished by Juan Carlos' 2012 Botswana hunting trip. Another scandal saw Juan Carlos' youngest daughter, Princess Cristina, testify this year in the fraud and money-laundering case engulfing her husband, the Olympic handball medalist turned businessman Inaki Urdangarin. 
 
 Juan Carlos won broad support for his handling of Spain's 20th-century challenges. Felipe VI must now address Spain's 21st-century difficulties. 
 
 Keeping the bill down for taxpayers is just one of the challenges facing the new king. 
 
 Much more pressing will be whether he can keep the country united as separatist movements, such as those in Catalonia and the Basque region, try to pull the country apart. Such an unraveling could place the monarchy itself in danger. 
 
 The abdication announcement initially triggered widespread demonstrations calling for a referendum on reinstating a republic. But a recent poll found that while 62 percent of respondents said they wanted a referendum on the monarchy "at some point," 49 percent said they favored a monarchy with Felipe as king, while only 36 percent wanted a republic. Others did not answer or expressed no opinion. 
 
 Felipe holds a law degree from Madrid's Autonomous University and obtained a master's in international relations from Georgetown University in Washington. His wife is a former television journalist and a divorced commoner. Many people feel that record will help make Felipe more attuned to the public mood. 
 
 Diego Garcia, the Complutense professor, believes Spain is going to see "a more austere monarchy, one closer to the people and the reality of the country." 
 
 The 2,000 guests invited to the royal reception were from a wide range of Spanish society, including Madrid ambassadors as well as representatives from the business, cultural, media and sports sectors. 
 
 Authorities have prohibited a planned demonstration in Madrid on Thursday by people demanding an end to the monarchy. 
 
 The palace said it had no information on the overall cost of the events, which will be overseen by some 7,000 police. 
 
 ____ 
 
 Hatton contributed from Lisbon, Portugal.
– Spain's Prince Felipe became King Felipe VI at midnight as the abdication of his father, King Juan Carlos, became official. The occasion was fairly low-key, with no foreign heads of state present and no huge state banquet, which the palace says was "in keeping with the criteria of austerity that the times recommend," the AP reports. The 46-year-old king was later proclaimed head of state in a parliamentary ceremony where he promised to be a monarch "who is ready listen and understand, warn and advise as well as to defend the public interest at all times," the BBC reports. The new king spoke of the need to "look ahead to the Spain we are building together as I begin this reign," reports CNN, which notes that while the monarchy remains popular in Spain, the royal family has been accused of corruption and excess during the country's economic crisis—and Juan Carlos' image suffered after he went on a luxurious elephant-hunting trip in the middle of the recession. Felipe and his wife, who is now Queen Letizia, will be driven through the streets of Madrid before appearing at the palace but they may find that many Spaniards aren't in the mood for cheering: The country's soccer team, which won the World Cup in 2010, crashed out of the tournament last night with a 2-0 loss to Chile.