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Greek tax workers protest against austerity as euro group meets in Brussels

ATHENS (Reuters) - Greek tax service employees took their protest against bailout-driven austerity to the heart of government on Monday, as Athens waits to hear if its reform plans are enough to satisfy euro zone finance ministers meeting in Brussels.

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A large, three-floor high banner that read ‘stop austerity’ was hung by the tax officers’ union on the facade of the finance ministry’s headquarters in central Athens.

“One more time, they are preparing measures that will hit the same social groups in the name of saving the country - low and middle incomes,” Dimitris Merkos, head of the Attica and Cyclades tax service employees, told Skai TV.

“Despite the government’s pronouncements that new measures will not bring even one euro of austerity, lowering the income tax exemption threshold will mean cuts in pay and pensions.”

Greece’s leftist-led government and its official creditors have yet to reach common ground on energy and labor market reforms, meaning that wrapping up a bailout review, which has dragged on for months, is set to take yet more time.

To break the impasse, the government, trailing the conservative opposition in opinion polls, has agreed to pre-legislate economic reforms, including cuts in income tax breaks and pensions to take effect from the 2019.

Under an 86 billion-euro ($92.7 billion) bailout program, the third since 2010, Greece is keen for new loans from euro zone countries to avoid defaulting on about 7.5 billion euros of debt falling due by July.

While tortuous bailout reviews and acrimony have been a familiar drama in Greece’s seven-year crisis, the drawn out negotiations have raised concerns in view of the looming debt payments in the summer.

Last week Greek Finance Minister Euclid Tsakalotos said he was confident a preliminary deal could be reached, paving the way for a comprehensive agreement by April 7, including debt relief commitments by the lenders.

But a senior euro zone official in Brussels was less optimistic, seeing slim chance of a technical deal on Monday and raising the prospect of a further extension of the negotiations until May.

“Between Scylla and Charybdis,” read the front page of Ton Syntakton daily, expecting Monday’s euro group meeting to only acknowledge that progress has been made on bridging differences.

($1 = 0.9280 euros)

Reporting by George Georgiopoulos