Many protesters also blew whistles as they blocked part of the Castellana boulevard Saturday carrying placards saying "We don't owe, we won't pay."
"None of us pushed the banks to lend huge sums of money to greedy property speculators, yet we are being asked to pay for other's mistakes," 34-year-old civil servant Maria Costa, who was banging an old pot along with her two children, said.
With unemployment nearing 25 percent, Spain has introduced biting austerity measures as well as financial and labor reforms in a desperate bid to lower its deficit and assuage investors' misgivings.
Spain has been granted a (EURO)100 billion ($130 billion) loan by the 17-nation eurozone to help its banks worst hit by the collapse of a bloated real estate sector. Still, Spain's economy is in a double-dip recession with a forecast to shrink by 1.5 percent this year and by up to 0. 6 percent in 2013.
Prime Minister Mariano Rajoy's government is also pushing for the European Central Bank to intervene in the secondary market to bring down Spain's borrowing costs, but the European Central Bank is insisting the country must first formally make an application for financial aid.
"They are cheating us by asking for us to pay by cutting public services," 19-year-old student Laura Lavinia said.
In the Portuguese city of Braga, several hundred artists and people opposed to their government's cuts to the culture budget protested under a banner saying "without culture people become dogs."