"Today, Europe's eyes are turned on us, today we are demonstrating for hope and future...to cancel the measures," Yannis Panagopoulos, head of the private sector union GSEE, told the rally.

Joint action

Some protesters carried signs calling on the authorities to "tax the rich" instead, while others held banners criticising the "plutocracy".

The action was called by public and private unions, representing half of Greece's five-million strong workforce, in the first joint strike since the Socialist government won elections last October.

Michalis Korileos, a 36-year-old civil servant, told the AP news agency he was striking "because others stole the money and we are the ones who are going to pay".

"They are cutting my allowances and I have two children to raise, it is difficult."

Some shops had their shutters down and the capital's chaotic traffic was quieter than usual.

Greeks, massed at bus stops downtown, complained about the disruption to public transport. All but emergency flights to and from Greece were grounded and ferries were at a standstill.

The strike takes place during a visit by EU officials assessing whether Greece is on track to cut its double-digit deficit.

European unrest

The action comes as fears over wages and job security grows among European workers, sparking protests in a number of other countries in the past week.

In France on Wednesday air traffic controllers continued to strike after action began on Tuesday, causing massive delays and cancellations at Paris' two main airports.

The action was called to protest planned reforms that workers fear will lead to losses of jobs and civil servant benefits.

It came as Lufthansa pilots ended a strike in Germany and British Airways cabin crews voted to launch one of their own.

Spanish workers unhappy about plans to raise the retirement age marched on Tuesday but the main protest in Madrid seemed relatively small, in a sign that the country's unions may be weakening.

Portugal's second largest union warned on Monday it would call more strikes if the government extended a public sector wage freeze beyond this year.

Transportation labour unions in the Czech Republic decided on Tuesday to also hold a strike in the capital Prague next Monday in protest against a new value-added tax on their workers' benefits.

The walkouts are the latest signs of a broader unease about jobs and benefits, and what the future holds for a continent struggling to stay competitive on a global scale.

Unemployment in the 16-nation eurozone is at 10 per cent, with Spain topping the jobless rate at 19 per cent.