If, and when, the package of spending cuts and tax increases is passed, lawmakers will have to approve the 2013 budget. That vote is penciled in for Sunday.

The prevailing view in the markets is that both votes will get passed but the margin of error is slim, given that a junior partner in the wobbly coalition government has said it will vote against the austerity bill if certain labor reforms are not extracted.

Worries over Greece have increasingly weighed on the euro over the past few sessions. Europe's single currency was down a further 0.3 percent Monday at $1.2794.

Earlier in Asia, Japan's Nikkei 225 index fell 0.5 percent to close at 9,007.44. Hong Kong's Hang Seng lost 0.5 percent to 22,006.40. South Korea's Kospi shed 0.6 percent to 1,908.22.

Mainland Chinese shares lost ground after four straight days of gains. The Shanghai Composite Index lost 0.1 percent to 2,114.03 and the Shenzhen Composite Index lost 0.5 percent to 858.60.

A key political event also takes place this week in China, the world's No. 2 economy. Thursday marks the opening of the Communist Party congress â¿¿ the once-in-a-decade forum used to name China's top leadership.

Tom Kaan, head of equity sales at Louis Capital Markets in Hong Kong, said it would be a "cause of concern" if China's new leaders do not take quick action to boost employment, particularly among the ranks of middle-income earners who have lost jobs amid the country's economic slowdown.

"Unemployment is one of the biggest concerns which nobody seems to be focusing on," he said. Investors are also hoping to see progress in the deregulation of China's financial markets.

Oil prices drifted lower alongside equities, with benchmark oil for December delivery down 25 cents to $84.61 per barrel in electronic trading on the New York Mercantile Exchange.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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