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imageTBILISI: Georgia on Sunday inaugurated its new president, Giorgi Margvelashvili, replacing charismatic reformer Mikheil Saakashvili after a decade at the helm of the ex-Soviet country.

Margvelashvili, a close ally of Saakashvili's arch-foe, billionaire Prime Minister Bidzina Ivanishvili, cruised to victory with around 62 percent of the vote at an election last month.

"Today the victor is our people's will," Margvelashvili said at a low-key ceremony in the courtyard of the former parliament building in central Tbilisi.

US President Barack Obama on Saturday congratulated Georgia on a "momentous political transition" and praised the contribution of "distinguished political leaders over the past 20 years".

Margvelashvili has pledged to press on with plans to join the European Union and NATO, key ambitions of Saakashvili that enraged Russia, while also seeking to improve ties with Moscow that were left in tatters by a brief 2008 war between the countries.

"Despite the difficult situation we are facing today and in parallel with integrating into European and Euro-Atlantic structures, we reiterate our commitment to deepening dialogue with Russia," Margvelashvili said.

Margvelashvili also reaffirmed Georgia's aim to initial a free trade agreement with the European Union at a summit in Vilnius later this month.

Dalia Grybauskaite, the president of Lithuania, which holds the EU rotating presidency, attended the inauguration ceremony, but no Russian representatives were present due to the collapse in relations between the two neighbours.

Margvelashvili, a former philosophy lecturer, assumes a weakened role because constitutional changes that come into force with his inauguration transfer a raft of key powers from the president to the prime minister.

Ivanishvili has promised to step down as premier next week and earlier this month named another loyalist, 31-year-old Interior Minister Irakli Garibashvili, to succeed him.

Margvelashvili's swearing-in marks the formal end of Saakashvili's tumultuous decade in power which saw him transform the tiny Caucasus nation while getting sucked into the disastrous five-day war with Russia.

A larger-than-life US ally, Saakashvili who came to power after the 2003 Rose Revolution rammed through reforms to slash corruption, renovate infrastructure and kickstart the devastated economy.

But the reforms angered many who felt excluded by the breakneck pace of change, and the use of police force to brutally put down protests against his rule tarnished Saakashvili's image as a crusading democrat.

Saakashvili who stayed away from the swearing-in ceremony without giving an explanation released a video Sunday splicing clips of memorable moments of his time in charge with footage of a classical pianist playing in the presidential palace.

According to recent opinion polls only a quarter of Georgians still approve of Saakashvili and Ivanishvili has warned that he could face prosecution after leaving office.

The new leadership team will now face the tough task of boosting Georgia's flagging economy and lowering high unemployment rates.

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