PARIS â€"  Francois Hollande became president of France on Tuesday in a ceremony steeped in tradition, taking over a country with deep debts and worried about Europe's future and pledging to make it a fairer place.

Hollande is only the second Socialist president of modern France, after Francois Mitterrand's 1981-1995 tenure, and rode to the presidency on a wave of resurgent leftist sentiment amid Europe's debt crisis and anti-free-market protests around the world.

Hollande, 57, was elected to a five-year term earlier this month after voters ousted incumbent Nicolas Sarkozy after only one term. Voters were disappointed over Sarkozy's handling of France's economy - which has high unemployment and low growth - and recoiled at his aggressive personality.

Hollande plans to leave shortly on his first diplomatic foray - to Berlin, where he is meeting German Chancellor Angela Merkel for a critical meeting on austerity and growth in Europe.

Arriving Tuesday morning at the 18th-century Elysee Palace that is the traditional residence of French presidents, Hollande was greeted by Sarkozy on the red-carpeted steps. The two held a 40-minute private meeting that is traditionally the moment when the outgoing president hands over the codes to France's nuclear arsenal.

Hollande was declared president after the head of the constitutional court read out the final results of the May 6 election.

In his first presidential speech, Hollande promised to fight financial speculation and "open a new path" in Europe but acknowledged that he inherits huge government debt. He has pushed back against austerity measures championed by Germany amid Europe's debt crisis and wants government stimulus instead. Hollande also pledged to bring "dignity" to the presidential role - something voters felt that Sarkozy did not always do.

Hollande immediately acknowledged the challenges he faces: "a massive debt, weak growth, high unemployment, degraded competitivity, and a Europe that is struggling to come out of crisis."

With the economy in the doldrums and joblessness high, the French mood is glum and many voters are looking to the inauguration as a rare moment of national pride, and to Hollande's presidency as a new opportunity to make things better.

World markets, other European leaders and France will be watching closely to see how and whether Hollande follows through on his campaign promises, such as calling for a renegotiation of Europe's budget-cutting treaty, freezing gasoline prices and hiking taxes on the rich. Observers expect that once he settles into the presidency, he's likely to fall back into the moderate consensus-building that has characterized his career.

A key sign will come when he names his prime minister, expected later Tuesday.

Guests at the ceremony included France's leftist political elite, 10 French Nobel Prize winners, France's chief rabbi, the head of an umbrella group of French Muslim organizations, the daughter of late President Francois Mitterrand's mistress and a host of cultural figures.

Hollande received the insignia of the Grand Croix from the hands of Gen. Jean-Louis Georgelin, who heads the prestigious Legion of Honor, and the necklace of the Great Master of the Order of the Legion of Honor. Each linked medallion of the necklace bears the name of a president, with Hollande's name recently added.

Sarkozy left the palace hand-in-hand with wife Carla Bruni-Sarkozy, had a last handshake on the palace steps with Hollande, then was driven away. Former staffers gathered in the palace courtyard applauded loudly as Sarkozy left, and fans gathered at the Elysee gates waving signs reading "Nicolas, merci!"

Hollande shook hands with many of the hundreds present at the ceremony then reviewed troops in the palace gardens. Following tradition, 21 gun shots were fired above the Invalides, a domed complex on the opposite side of the Seine River that holds Napoleon's tomb.

Rain started pouring down on the famed Champs-Elysees avenue as Hollande rode up its center, standing out of a sunroof of his hybrid Citroen DS5, trailed by dozens of Republican Guardsmen on horseback and motorcycle. His suit was visibly drenched within moments. He then headed for the Arc de Triomphe, and its monument to the unknown soldier.

Military band and soldiers at attention await arrival of Hollande motorcade parading up the capital's central artery. The normally traffic-clogged avenue was closed to cars and buses and eerily empty around midday, ahead of the first procession of Hollande's presidency. Crowds were sparse, and the weather blustery.

Hollande, who has four children but has never been married, was joined for the Elysee ceremonies Tuesday by his partner, journalist Valerie Trierweiler.

Sarkozy's inauguration five years ago broke with some of the tradition that the French associate with the Elysee Palace, and offered up a first lady in Prada and romantic intrigue instead. The then-president and his then-wife Cecilia - both already on their second marriages, and on the verge of divorce - posed on the red carpet with their blended family of five kids.

Sarkozy's hands-on presidency brought change to the once-stuffy Elysee - but that, and Sarkozy's image as a man too friendly with the rich while recession hit, ultimately turned many voters against him.

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Cecile Brisson in Paris contributed to this report.