After getting the approval of the lower house last week, Italian Prime Minister faces a key confidence vote in the upper house on Thursday to pass a 33-billion-euro austerity measures that Monti said would lower Italy's borrowing cost.

Although bond yields on 10-year notes have retreated to 7%, yet it is still deemed above safe levels of 5%.

Monti believes the approval of the austerity measures although may put pressure on growth it would restore confidence in markets.