MADRID  - Spain’s new King Felipe VI swore to serve the crisis-stricken nation as he launched his reign on Thursday, cheered on by crowds of revellers in a sea of red and yellow flags.

Thousands of Spaniards put aside their World Cup misery to line the sun-splashed streets, yelling “Long live the king!” as the newly-proclaimed Felipe, 46, and his glamorous Queen Letizia, 41, waved from an open-topped, black Rolls Royce.

A tall, former Olympic yachtsman, Felipe faces the task of polishing the image of a monarchy tarnished by scandals and winning over a country wearied by recession and political corruption. Swearing his oath in parliament in a dark blue military uniform, Felipe promised “a renewed monarchy for new times”, after scandals that tainted the reign of his abdicated father, Juan Carlos. Felipe pledged his “faith in the unity of Spain”, where separatist tensions are high in the northeastern region of Catalonia.

Applause and cries of “Long live the King!” filled the chamber as he finished his speech and turned to kiss Letizia, who wore a white knee-length dress and coat.

After the swearing-in the king stood and waved from the car, flanked by guards on horseback with silver helmets and breastplates winking in the sun, during a drive with his wife through central Madrid to the old Royal Palace where a crowd of thousands was waiting.

Felipe and Letizia - a former television newsreader - appeared on the balcony of the Royal Palace with their blonde, blue-eyed daughters eight-year-old Leonor, who is now heiress to the throne, and Sofia, seven, and waved to cheering crowds below.  The celebrations offered a distraction from the national gloom of Spain’s humiliating exit from the football World Cup on Wednesday in a 2-0 beating by Chile. “We have lost the World Cup but that doesn’t matter. It is a new day and a new king. We have to celebrate,” said Eduardo Chaperon, a 24-year-old economist waving a Spanish flag and wearing a novelty inflatable crown in the street. Not everyone joined in the party though. Protests by campaigners who want Spain to be a republic broke out after Juan Carlos announced his abdication on June 2. Police banned a similar protest called by activists for Thursday.

Juana Leon, a 69-year-old retiree wrapped in the red, yellow and purple Spanish republican flag, complained that she and her friends were blocked from demonstrating.

“It is shameful. It is a breach of our freedoms. What kind of democracy is this?” she said. “We spend a lot of money on all this but it doesn’t serve Spain at all,” she said of the royal family.

Police closed off city-centre avenues and snipers deployed on roofs in a 7,000-strong security operation for the royal festivities.

In keeping with Spain’s tough economic times, festivities remain relatively restrained, however, compared to other European royal coronations and no foreign leaders or royals were invited.

The crowds in the streets were colourful and noisy but not as big as in other recent celebrations such as Spain’s Euro football championship triumph in 2012.

On Wednesday, a teary-eyed and infirm Juan Carlos, 76, ended his reign with a stroke of a golden pen as he signed his act of abdication in the tapestry-clad Hall of Columns in the Royal Palace.

Juan Carlos, who walks with a cane after repeated hip operations, hugged Felipe and briefly gripped his son’s arm to steady himself in his final act as monarch.

The former king earned broad respect for guiding Spain to democracy after the death of General Francisco Franco in 1975 and for thwarting an attempted military coup in 1981.

But he outraged public opinion in 2012 by going on a luxury African elephant-hunting safari during Spain’s bitter recession.

Meanwhile Felipe’s elder sister, the 49-year-old Princess Cristina, is waiting to hear whether she will go on trial on tax crime charges.

But even as others in the family suffer falling approval ratings, Felipe’s popularity has actually climbed.

A poll taken after Juan Carlos announced his abdication on June 2 showed almost 77 percent of respondents had a good or very good opinion of his son.

“It feels like the end of a cycle,” said Jose Antonio Gomez, who runs a soft drinks stall outside the old Royal Palace.

“Now it is good to have a new king. His father did it very well and Felipe knows how to solve Spain’s problems: Catalonia, the crisis. At least I hope he does.”