Tens of thousands of striking Greek workers took to the streets today, some throwing stones at police, in a defiant show of protest against austerity measures aimed at averting the debt-plagued country's economic collapse.

Riot police responded with teargas when, in sporadic bursts, masked youths charged them in Athens city centre. The violence coincided with a general strike that shut down public services and closed off Greece to the outside world.

For trade unions the mass show of force was a warning shot to a government struggling to satisfy its eurozone partners with policies deemed vital for the nation's fiscal health while appeasing angry workers at home.

"This is the red line," said Nikos Goulas, head of a union that represents 20,000 workers at Athens international airport. "Greece is not Ireland. If the government does not back down there will be huge unrest," he added, holding a banner that proclaimed: "As much as you terrorise us, these measures won't pass."

The protests came against a backdrop of mounting Greek hostility towards the EU, with particular venom reserved for Germany, which has pressed for harder measures to be forced on Athens.

Greece's political elite has been outraged and hurt by hard-hitting German media coverage of the debt crisis. The cover of a German magazine, Focus, which showed the Venus de Milo making a less than complimentary finger gesture under the headline "Swindlers in the eurozone" has triggered widespread fury.

In an extraordinary tirade, the deputy prime minister, Theodore Pangalos, said Germany had no right to judge Greek finances after wreaking havoc on the economy during the four years that the country was under Nazi occupation in the second world war. Worse still, he said, Germany had failed to make adequate compensation.

"They took away the Greek gold that was at the Bank of Greece, they took away the Greek money and they never gave it back. This is an issue that has to be faced sometime," he told the BBC.

"I don't think they have to give back the money necessarily but they have at least to say thanks. And they shouldn't complain so much about stealing and not being very specific about economic dealings."

Pangalos, a former foreign minister who is widely seen as a father figure to the more mild-mannered Greek prime minister George Papandreou, said Greek public finances might never have reached such dire straits had the EU not had such weak leadership.

Italy, he added, had done much more to mask the true extent of its public debt and deficit than Greece when it entered the EU. "The quality of leadership in the union is very, very poor indeed," he said.

today, as the diplomatic row intensified amid growing demands that George Papandreou's Socialist government step up claims for war reparations, Berlin hit back with a tart reminder that Greece had received 115m deutschmarks in compensation by 1960.

"I must reject these accusations," said Andreas Peschke, a spokesman at the German foreign ministry. Greece, he said, had also received around €33bn in aid from Germany "both bilaterally and in the context of the EU".

"A discussion about the past is not helpful to solve the problems … facing us in Europe today."

Athens has barely three weeks to prove to its EU partners that the spending cuts and tax rises it has announced are working. With the euro severely undermined by the country's debt crisis, the government has announced an ambitious cost-cutting programme to reduce the public deficit from 12.7% of GDP to just under the permissible EU level of 3% by 2012.

This week, as an EU monitoring team visited Athens to examine the progress being made, finance minister Giorgos Papaconstantinou hinted at further measures, saying the government "will do whatever is needed" to solve the crisis.

But if Greek workers have their way such targets may be out of reach. For low- and middle-income earners, the policies, which include a public sector wage freeze, a rise in pensionable age and higher taxes, will be particularly painful.

"I already have to make do with €345 a month," said Kostantinos Doganis, a pensioner participating in the strike, the first mass walkout in Greece since the Socialists assumed power last October.

"These measures have not yet been passed. Once we start to feel their effect in our pockets there will be a downpour of protests, a social explosion in this country."