The Palacio d'Oriente, historically the residence of Spanish monarchs, stretches ominously across a high bluff overlooking Madrid. A museum currently occupies its 2800 rooms, with the main hall used for an occasional state dinner. But King Juan Carlos prefers to live in a compact 20-room estate on the outskirts of the capital.

The home address of Spain's 17th reigning sovereign is no small matter. By avoiding the castle last occupied by his grandfather Alfonxo XIII in 1931, Juan Carlos Alfonso Victor Maria de Borbon y Borbon is sending a signal of solidarity with his countrymen's longing for self rule.

But the king's home is only one of many symbols propitious for Spanish democracy.

Whether by fortunate accident or grand design, Juan Carlos, today's Harvard Commencement speaker, has guided his nation away from its reaction past to a fragile democracy. And it has happened in the eight and a half years since he ascended the throne. It is a Cinderella story, with happily ever after for the Spanish people at stake.

The 46-year-old monarch's ugly stepmother was the tradition of 36 years of jackboot authoritarianism under General Francisco Franco. Competing for the nation's attentions were two ugly stepsisters--the anachronistic force of the Right and extremists of the Left who hoped to rush the process.

Using the powers available only to El Caudillo's chosen successor, Juan Carlos moved cautiously by approaching the moderates of Spain. He slowly replaced Franco's highest appointees with what he called "the civilized right." He invited leaders of the outlawed Communist and Socialist parties to dinner. Assistant Professor of Government Terry Karl, a specialist in that process, says. "It's rare to find a figure that commands that kind of respect who will throw his weight behind the democratic transition."

By December 1978 the King felt free to sign a new constitution. Four months later, Spain held its first free elections in over 40 years, with 9000 candidates representing 27 political groups.

What Juan Carlos retained in the new constitution was his title as supreme commander of the armed forces. It is in this role that the monarch has proven his mettle as leader. He referees the sparring between the civilian government and the military, which at once represents tradition to the Right and constitutional stability to the Left.

Aborted Coup

His officers did not wholeheartedly accept the strikes and social reforms that accompanied pluralism. On February 23, 1981, some of them tried to crush the glass-slipper state with a military coup. They claimed the backing of the sovereign. Juan Carlos took to national television to denounce their power play and rally his own faction.

"At that moment, the only institution that could stop the military was the king," says Luis Riera, a Spanish business professor, currently a visiting scholar at the Center for International Affairs. "So he did," Karl says his moves "disarmed and delegitimized [the Right] in the military," demonstrating a "strong commitment to the new rules of the game."

Smith Professor of the French and Spanish Languages Juan Marichal notes that the abortive coup underscored the link between the crown and the new democracy. "The people in the army who wanted to turn back the clock knew that they couldn't do it without killing the king." He adds that the monarch's response made clear that "loyalty to him is loyalty to the constitution."

Since 1981, the association between the monarchy and continued stability has grown, fueled by the rise in Juan Carlos's personal popularity. "To have a traditional institution that people can look at as a connection of the past to this changing present is important," says Karl. She notes that of other nations that had not made the transition to democracy smoothly. "Nobody else has a king; nobody else can play that role."

Juan Carlos plays it to a tee. In a fireside chat last Christmas Eve, he warned his countrymen of the danger of pessimism.

Ahead

The danger in the future, some observers feel, is that the Spaniards see Juan Carlos himself, not the monarchy, as the symbol of national unity and reconciliation. But Marichal says that the regional autonomy granted by the 1978 constitution has raised participation to a level that makes retrenchment unlikely. "Democracy is taking root in a way never seen before," he explains.

Marichal says that the freedom given to Spain's historically fractious provinces is largely due to faith in this "singular function of the crown."

"Catalonia sees the king in Madrid with different eyes than Catalonia would see a president in Madrid," he says. As evidence, in 1979 the sovereign became the first in over 500 years to address the parliament of the highly separatist Basque region.

As domestic affairs have become more stable, Juan Carlos has been able to turn his attention to ending the international isolation Francoism required. Acting more as a super ambassador than a official diplomatic representative, he has travelled extensively in an attempt to make Spain seem more accessible. Last year it was Africa and Latin America, this year Canada and the Soviet Union.

The South American trip was particularly im- portant for the king, who is firmly committed to hispanidad--the unity of all Spanish-speaking peoples. He was received as a here wherever he went. "He is the symbol of a new future, or the new possibility for Latin America," says Marichal. "In Montivideo, the entire city was out in the street shouting, 'Long Live the King,'" he adds. "What they were really shouting was, 'Long Live Democracy.'"

Wherever he trots on the globe, Juan Carlos preaches the universal gospel he learned in Spain's transition. "If there's an international figure that stands for negotiation, peaceful resolution, and statecraft, it is him," comments Karl.

That Juan Carlos is seen now as the architect of Spain's transition and has achieved such international recognition is mildly amazing, considering his enigmatic presence at the time of Franco's death. Opponents called him a puppet, a tin soldier. They chided him for walking well behind the 5 ft.-3 in, general so as not to embarrass him with his courtly 6 ft.-2 in. frame. He was once called "the son Franco never had." Wags named him "Juan the Brief" because his public statements were short and infrequent.

His ability to lead, to hold his throne were questioned. As a Bourbon, he was scion of a royal line that had frequently failed. Both sides of the political spectrum prepared for the worst. His sure and simple belief in the inevitability of democracy for Spain was seen as political naivete.

What was most readily assessible was his princely biography. At age ten, Franco had negotiated a deal with his father Don Juan, the pretender to the throne, to raise the boy. He graduated from Sargossa Academy, the Spanish West Point, and spent a year at both the naval and air schools. He is the only man commissioned in all three service branches.

This education has been the key to the monarch's leverage on the naval forces, observers say. "It matters that this is a military man," says Karl. "He has been able to deal with the right-wing tendencies of the military without degrading the military as an institution." The King sure said of his officers. "I knew them. I used to take showers with them."

Tall and athletic, Juan Carlos was known is an avid sportsman (and still is, although a pelvic injury last year has slowed him somewhat). He was a member of Spain's 1972 Dragon-class Olympic sailing team. A black belt in karate, it was said its kept his broken boards in a mansion closet. He is also an avid motorcyclist.

In 1962 the great grandson of Queen Victoria of Great Britain married Princess Sofia of Greece, a pediatric nurse and amateur archaelogist, in the social event of that season. They had two daughters, 20-year-old Elens and 19-year-old Cristina, and a son, aged 16, Felipe.

Since he took the throne November 22, 1975, the King has repeatedly demonstrated that his competence is as much fact as his life history.

"There were a lot of jokes where he appeared foolish or lacking strong character," says Rosa Maria Calaf, assistant bureau chief of Spanish national television's New York Bureau. "Those have completely disappeared." The common thinking today is that as prince Juan Carlos could not risk his position as successor to assure his critics. "He was playing a role," says Calaf, adding. "He didn't want to appear as a danger to the [Franco] regime."

If he could depend on a fairy tale ending, all would be well. But Karl points out that "nothing is firm or solid in Spain," and anti-monarchists note that his grandfather ruled for 29 years before fleeing to Rome.

But pessimism is not the stuff of Juan Carlos's reign, as the king likes to say himself. He has time to cement the transition. Says Marichal of the king's reign thus far, "Probably even Franco would be surprised.