European stocks pulled back from multi-year highs in thin trading Monday as investors eyed political development in Spain and Italy ahead of key interest rate decision this week by the European Central Bank.

Benchmark Spanish and Italian bond yields rose cautiously in Europe amid renewed pressure on Prime Minister Mariano Rajoy to resign over corruption allegations and a new push by former Prime Minister Silvio Berlusconi to entangle his rivals into the on-going financial scandal at Banca Monte dei Pashci ahead of this month's parliamentary elections.