* About 7,000 people join second day of Blockupy anti-capitalist protests
* Small groups of stone-throwing protesters clash with police
* Frankfurt is home to European Central Bank, big commercial banks
By Eva Kuehnen
FRANKFURT, June 1 (Reuters) - German police used pepper spray and batons against anti-capitalist demonstrators from the Blockupy movement on Saturday during a second day of protests against Europe's austerity policies.
Around 7,000 protesters joined an initially peaceful march through Frankfurt, Germany's financial capital. Many brandished signs with slogans that read "Make love, not war" and "IMF - get out of Greece".
Small groups of masked protesters then hurled stones and smoke bombs at the police who responded with force. Several protesters and police officers were hurt.
Protests against the "troika" of international lenders that has bailed out struggling euro zone states - the International Monetary Fund, the European Central Bank (ECB) and the European Union - were planned in several countries on Saturday.
A first day of protests on Friday in Frankfurt succeeded in paralysing some of the city's financial institutions, cutting off access to the ECB's iconic tower office building and Deutsche Bank's headquarters.
Police angered the marchers on Saturday by halting the march before it could pass close to the ECB building after protestors let off firecrackers.
In a statement, Blockupy accused the police of wanting to "escalate" tensions and of blocking a legitimate protest.
"This is scandalous," spokeswoman Ani Diesselmann said. "The (original) route was approved by several legal institutions."
Police said officers had been repeatedly attacked by the small group of demonstrators, making it necessary for them to use force and pepper spray.
Europe's Blockupy movement was formed after the Occupy Wall Street movement in 2011. They blame the budget cuts and labour market reforms supported by the ECB, the IMF and European financial and political leaders for driving the continent into a recession that has left more than a quarter of Greeks and Spaniards out of work and millions of Europe's poor worse off.
"This is a good opportunity (to protest). Youth unemployment is so important right now," said Antonia Proka, 25, a Greek who now lives in the Netherlands.
"I have lots of German friends who don't find jobs so the problems are the same, we are on the same side," she said.
While more than half of Spaniards and Greeks under the age of 25 are unemployed, only 8 percent of Germans and Austrians from the same age group are out of work.
Governments struggling with large debt burdens have cut spending and raised taxes, deepening recession across the euro zone, while many families are deep in debt or have lost their homes after property bubbles burst.
Germany's own economy has been fairly resilient to the crisis and many in Europe's struggling southern states blame Chancellor Angela Merkel for enforcing the painful policies in exchange for EU funds which largely come from Germany.