Greek police have fired teargas at hooded youths hurling petrol bombs and stones as tens of thousands took to the streets in the country's biggest anti-austerity demonstration in months.

The clashes occurred after more than 50,000 people marched to parliament chanting, "We won't submit to the troika" and "EU, IMF Out!" on a day of strikes against a new round of cuts demanded by EU and IMF lenders.

As the rally ended, dozens of black-clad youths threw stones, petrol bombs and bottles at riot police, who responded with several rounds of teargas.

Police chased the protesters through Syntagma square in front of parliament as helicopters clattered overhead. Smoke rose from a small blaze in a corner.

The strikes, called by the country's two biggest unions representing half the 4 million-strong work force, is shaping up to be the first test of whether prime minister Antonis Samaras can stand his ground.

Police officials estimated the demonstration was the largest since a May 2011 protest and among the biggest since Greece first resorted to aid from international lenders in 2010.

"We can't take it anymore - we are bleeding. We can't raise our children like this," said Dina Kokou, a 54-year-old teacher and mother of four who lives on 1,000 euros a month.

"These tax hikes and wage cuts are killing us."

Nikitis Kanidis is a neurosurgeon earning just over $1,200 a month and under $4 an hour overtime.

Mr Kanidis says he is worried about the patients in understaffed hospitals.

"If you visit hospital at night you'll see at least one or two relatives per patient who get a special pass in order to act as a nurse for the patient because there is one nurse for 80 patients," he said.

"Health should be the first priority of the government, not the last."

'Caught in a death embrace'

Yanis Varoufakis, a professor of economics at the University of Athens, says he is surprised there is not greater unrest around Europe.

"We have a unique case in economic history where banks that are insolvent and states that are insolvent are caught in a death embrace with one another bringing the whole society down with them," he said.

"The people who were least responsible for this debacle being required to pay the bill for it."

Strikes and protests have also hit Spain, with thousands in Madrid protesting against austerity measures.

Spain has so far avoided asking for an additional bailout, but the Bank of Spain has announced the country's economy has continued to shrink at a significant rate in the third quarter of the year.

"The whole game that is being played is designed so that everybody loses - the Spanish government, the Spanish banks, the German banks, the whole of the euro zone and its people," said Mr Varoufakis.

"It is a cruel game that cannot come to any good for anyone in the world."

The traditional summer break has allowed the fragile conservative-led coalition to enjoy relative calm on the streets since narrowly coming to power on a pro-euro, pro-bailout platform, but unions predict an end to the lull.

"Yesterday the Spaniards took to the streets, today it's us, tomorrow the Italians and the day after - all the people of Europe," Yiorgos Harisis, a unionist from the ADEDY public sector group told demonstrators.

"With this strike we are sending a strong message to the government and the troika that the measures will not pass even if voted in parliament, because the government's days are numbered."

'Traitors'

About 3,000 police - twice the number usually deployed - stood guard in the centre of Athens, which last saw serious violence in February when protesters set shops and banks ablaze as parliament approved an austerity bill.

Police formed a barricade outside parliament, and officers blocked a pensioner who tried to move towards Mr Samaras's office holding a banner with pictures of Greek prime ministers under the title: "The biggest traitors in Greek history."

Ships stayed docked, museums and monuments were shut to visitors and air traffic controllers walked off the job for a three-hour stoppage.

Much of the union anger is directed at spending cuts worth nearly 12 billion euros over the next two years that Greece has promised the European Union and International Monetary Fund in an effort to secure its next tranche of aid.

The bulk of those cuts is expected from cutting wages, pensions and welfare benefits, heaping a new wave of misery on Greeks who say repeated rounds of austerity have pushed them to the brink and failed to transform the country for the better.

Reuters