French Unionists gather at Place de la Concorde, in front of the National Assembly in Paris, on Wednesday to protest against President Nicolas Sarkozy's proposed pension reforms. (Francois Mori/Associated Press)

France's National Assembly has approved a broad retirement reform plan, including a highly contested measure to increase the retirement age from 60 to 62.

The lower house of parliament voted 329-233 in favour of the retirement package Wednesday, a crucial first legislative hurdle. The bill now goes to the Senate.

The vote followed a boisterous overnight session on one of the pillars of conservative President Nicolas Sarkozy's reform agenda and a prime target of France's powerful unions.

The increase would go into effect in 2018.

France's labour minister, Eric Woerth, has called the measure a "real moral obligation," given France's burgeoning deficit and its aging population, which he said threatens the viability of the money-losing pension system.

The reform would save nearly $30 billion in 2018 and should bring the pension system back into the black that year, Woerth said in June, when the proposal was announced.

He said the reform would bring France more into line with other European countries, which have raised retirement ages and taken other measures to slash deficits.

Still, the French measure pales in comparison with more drastic changes elsewhere in Europe. Germany, for example, is to gradually raise its retirement age from 65 to 67, starting in 2012 and wrapping up in 2029.