“Portugal is just one of the examples where the economic situation remains stressed and social distress is indeed very high,” he told a hearing of the European Parliament’s economic and monetary affairs commission.

He also said that high youth unemployment was “a tragedy”.

Draghi said: “What the ECB has done is basically to say: Look, don’t unravel the progress that these countries, and Portugal especially, have achieved on fiscal consolidation.

“But make this fiscal consolidation growth-friendly — lower your taxes, lower your current expenditures, make structural reforms.”

The ECB chief added, in comments streamed online: “We know that fiscal consolidation was and still is unavoidable.

“If fiscal consolidation were to be unravelled … we know what the market reaction would be, we know interest rates would go up.”

The ECB last week held its key rate steady at 0.50 percent for a third month in a row, and Draghi in an unusual move telegraphed sustained low rates by saying that “monetary policy will remain accommodative for as long as necessary”.