Communist leader Aleka Papariga led thousands of union activists and their supporters in a peaceful rally in central Athens on Saturday, accusing ministers of colluding with international bankers to "skin the people alive."
About 6,000 members of the Communist Party of Greece (KKE) affiliated All Workers Militant Front (PAME) marched against the government's "medium-term fiscal programme" in the capital's Omonia Square, while slightly smaller numbers turned out in Thessaloniki and other major cities.
The European Central Bank and the International Monetary Fund (IMF) are threatening to withhold a €17 billion (£15bn) loan from Socialist Prime Minister George Papandreou's government unless it agrees by the end of the month to slash public spending by €28bn (£24.75bn) and sell off €50bn (£44bn) of state assets.
Mr Papandreou claims that he has no choice but to go ahead with the cuts because, without the new loan, his government would have to default on its debts.
But the country's trade unions say that the government should raise taxes on the super-rich and clamp down on tax dodging and other elite corruption, instead of taking an axe to the country's social safety net.
Following a general strike and massive protests led by trade unions last Wednesday, Mr Papandreou reshuffled his government and made former rival Evangelos Venizelos the finance minister.
But people at Saturday's rally insisted that it was the government's regressive policies that needed changing.
Addressing the crowd outside parliament, Ms Papariga said: "Don't be fooled - don't fall into the government's trap.
"Lenders and debtors will sit at the same table, having agreed to skin the people alive."
Actors from the French Theatre de Soleil group joined protesters and put on a show that depicted IMF and EU officials battering a bloodied figure of Lady Justice.
Director Ariane Mnouchkin said: "The people here in the square are asking for only one thing and that is justice.
"They want to retake the keys to our European countries which we gave away, very carelessly, 40 years ago to the financial markets."
Mr Papandreou's new government faces a confidence vote in parliament on Tuesday. The ruling Panhellenic Socialist Movement holds a slim majority, with 155 of the 300 seats.
If it survives the vote, Mr Papandreou is expected to seek parliamentary approval for the austerity package by the end of this month.
Greek unions have announced that they will kick off a 48-hour strike if that happens.