The European Central Bank President admits the renewed calm in the euro area's markets has yet to be reflected in the wider European economy.
Speaking at the World Economic Forum in Davos, Mario Draghi said that markets for stocks, bonds and bank credit have "a new, restored sense of tranquility."
But he added that "we don't see this being transmitted into the real economy yet."
Draghi said governments need to move on structural reforms to make their economies grow faster, which will help reduce government debt.
He said that once that is achieved, the stimulus from the ECB's low interest rates and easy credit to banks "should find its way through to the economy and we will see a recovery in the second half of the year."