Draghi was appearing before parliament's economic and monetary affairs (ECON) committee in the bank's final quarterly monetary dialogue of the year.
He emphasised the need for fiscal consolidation and structural reforms but warned that the most recent economic forecast "shows growth momentum has weakened during the summer and that the forecast needed downward adjustment. This could dampen confidence and private investment in the euro area."
The ECB predicts growth will remain low in the coming months but gradually increase in the next two years.
Looking forward, Draghi welcomed advances towards the greater integration of the financial markets, through the capital markets union (CMU), which he said would "reduce fragmentation of financial markets, improve funding to SMEs, enhance the transmission of the ECB's monetary policy, and overall benefit economic growth". He said the ECB looked forward to more detailed proposals from the commission.
Draghi was critical that short term reforms were still unforthcoming from member states saying that it was "time to take these decisions".
On the recent luxleaks scandal, Draghi said the ECB had no view on this and joked that this was because "we haven't been given tax powers yet".
Risk of ECB becoming a 'bad bank'
Draghi rejected comparisons of the bank's recent launch of a programme to buy assets backed securities (ABS) with US sub-prime lending. He noted, "We don't have sub-prime in Europe. The default rate in the US was 18 per cent, whereas in Europe, it is 1.5 per cent."
Bernd Lange of parliament's S&D group, referred to comments made recently by the international monetary fund's Christine Lagarde on the easing of debt rules. He told Draghi, "your efforts have not been successful" and that there was a risk "the ECB might become a bad bank".
Draghi replied that the ECB's rules are "the anchor of confidence" but that "they have been written with a certain amount of flexibility". He rejected Lange's suggestion that the ECB's monetary policy had been "extraordinarily successful".
He highlighted that member state banks must now "pay to park their money with the ECB" instead of making use of it for lending purposes. He concluded that the ECB's "very successful efforts at strengthening the banking system" was evident from the fact that banks were now responsible for 80 per cent of credit flows.
2015 "needs to be the year when all actors in the euro area [...] will deploy a consistent common strategy to bring our economies back on track." - Mario Draghi
There was further criticism of the ECB's actions from non-attached ECON member Barbara Kappel, who said the bank's buying of state bonds sends the wrong signal to member states, given that some have not undertaken the required reforms.
Ireland bailout letters
The release of correspondence between the former Irish government and the ECB was raised by EPP ECON member Brian Hayes and GUE/NGL substitute member Matt Carthy.
Draghi emphasised that domestic factors were to blame for Ireland's bailout and backed the actions of his predecessor Jean-Claude Trichet. He said the ECB had given "extraordinary support" to Ireland in the years before the "adjustment programme" and at one point this commitment accounted for 25 per cent of its emergency liquidity, or 85 per cent of Irish gross domestic product.
Under questioning from Hayes, Draghi appeared to reject the idea that the ECB should appear before an upcoming Irish parliamentary banking inquiry. Hayes said the undertaking of the long delayed inquiry without the ECB would be "like Hamlet without the prince". Draghi replied that the ECB would not "participate formally" in the inquiry.
Following the committee meeting, Carthy criticised Draghi for failing to adequately engage with questions and reading from "a prepared script".
He added, "That the ECB can just state that they will refuse to engage in a formal enquiry of a eurozone member parliament is the result of [Ireland] handing over sovereign power without enshrining necessary accountability."
ECB role in assisting SMEs
The ability of small and medium sized enterprises (SMEs) to access credit facilities was raised by several parliamentarians.
ECON committee vice-chair Peter Simon asked what the ECB could do to assist the growth of SMEs. He highlighted that banks, in some cases, have money but were refusing to lend it. Draghi replied that things were improving in the SME sector with "the risk perception by banks [improving] dramatically".
The ECB president acknowledged that in historic terms the supply of credit was low but that when compared to recent years, "the credit cycle is turning for the better". He said that in some member states SMEs were "over leveraged" and that SMEs catering for the internal market remained weak.
Draghi concluded his presentation by saying 2014 had been "a year of profound change" and that "what has been achieved so far is not enough". The ECB president said next year "needs to be the year when all actors in the euro area, governments and European institutions alike, will deploy a consistent common strategy to bring our economies back on track."