Thousands of protestors packed the square outside Gunnlaugsson's office and coated the windows with thrown yogurt.
The big event was held in the capital city of Lefkosia (Nicosia) and attracted a massive turnout from the populace, especially labor.
Because Germany has the biggest economy in the EU, and is at the center of a "core" of wealthy nations that also use the Euro - France, Austria, and the Netherlands - Berlin largely calls the shots.
The countries of the European south, Greece in particular, have suffered due to the world crisis of capital. The crisis has now turned on the Mediterranean nation of Cyprus with a vengeance.
Some 350 historic buildings in the capital and historic towns across the country are to be sold off.
Union leaders, including AFL-CIO President Richard Trumka, delivered the strong message that "austerity does not work," and only makes things worse for workers, to the G-20 leaders of the industrialized world, meeting in Los Cabos, Mexico.
Mariano Rajoy's promise went the same way as his pledges on not raising tax - in the shredder.
A general strike called by Portuguese unions against austerity measures imposed by international finance capital practically shut down Portugal last Thursday.
The European Union and European Central bank are forcing European nations saddled with heavy debt loads to cut public services. Spain is among them.