Monti mustered support from an overwhelming majority in Italy's upper chamber, with 281 out of 307 senators in attendance backing his plan to pull the country back from the brink.
"The future of the euro also depends on what Italy will do in the next few weeks," Monti said, adding that his new technocratic cabinet would implement "austerity measures" that would be balanced by "growth and equity".
The BBC reported protests in Rome and several other cities as he spoke.
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The former European commissioner said Europe was living through "the most difficult years since the second world war" and warned that the European project "could not survive the collapse of the monetary union".
He said Italy must stop being considered Europe's "weak link", otherwise "we risk becoming partner to a model we have not helped build", and which could instead be built by countries "who do not want a strong Italy".
However, he added: "We don't consider the European obligations to have been imposed by external forces. It's not a case of them on one side and us on the other. We are Europe.
"We need measures to make the economy less fossilised, help new industries to grow, improve public services and favour youth and female employment."
Monti, whose economic program had been hotly awaited by global leaders, said he intends to overhaul the labour market and pensions system, which has "unjustified privileges for certain sectors".
Both are measures the European Union has called for and their inclusion in the announced reforms is expected to reassure markets.
Monti also said he hoped to reduce labour tax and look into re-weighting estate tax, adding that the absence of property tax on main households since it was abolished under the former Silvio Berlusconi government was an Italian "anomaly".
"If we fail, if we don't carry out the necessary reforms, we will also be subjected to much harsher conditions," he warned.
The prime minister, who took over from the ousted billionaire Berlusconi on Wednesday, said the "absence of growth cancelled out sacrifices" and promised to respect Italy's timetable to balance its budget by 2013 and reduce its debt.
Monti's speech on Thursday was well received, and the Senate speaker had to intervene and call on members of parliament to listen rather than applaud wildly.
