Greece took a step towards overhauling its ailing public finances by giving preliminary approval for a bill that would increase the retirement age and cut benefits.

The new law sets a retirement age of 65 for both men and women, and reduces payouts by basing pensions on lifetime income, rather than final salary, The New York Times reported. Currently, many Greeks can retire before they are 50.

"This is our passport out of hell," Yannis Stournaras, an Athens-based economist, told The New York Times.

The bill was approved in principle by a 159-137 vote late on Wednesday. Individual provisions will be voted on today, before a final vote on the whole package.

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