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By Harry Papachristou
ATHENS (Reuters) - Greece is optimistic of meeting or even beating targets for slashing its budget deficit in 2010 as part of austerity demanded for an EU and IMF bailout, Finance Minister George Papaconstantinou said on Thursday.
He also said that the socialist cabinet would sign off on a controversial pension and labour reform bill on Friday before submitting it to parliament for approval. The reform has sparked protests by unions, including a general strike planned for June 29.
"We have the well-founded hope and are optimistic that the budget targets will be achieved or even be exceeded," he said in a speech at a bankers' conference.
Greece plans to cut its budget deficit to 8.1 percent of gross domestic product (GDP) in 2010, down from 13.6 percent in 2009, as part of conditions for the 110 billion euro ($147.6 billion) bailout.
He said that the government had made progress and had cut the budget deficit by 40 percent in the first 5 months of 2010.
"We have overcome the hardest part," Papaconstantinou said.
"Tomorrow we are approving the framework of a major pension reform for the public and private sector... we will also adopt a new framework for labour relations," he said.
"BIG MOVES" FROM BANKS
Papaconstantinou also urged reforms of the country's banking system.
"Now is the time to see the great moves that will safeguard the future of the banking system," he said in a speech.
"It is the time for you to look very carefully at the way you operate, look for example how you compensate senior management and exhaust every way to provide liquidity at the right terms to Greek households and businesses."
He did not specifically mention mergers.
Earlier this week, Alpha Bank, Greece's third largest, dismissed media speculation that it was seeking to merge with another bank to cope with the country's debt crisis.
(Writing by Alister Doyle and Ingrid Melander; editing by Patrick Graham)
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