Draghi said the ECB would draw up a mechanism in coming weeks to make outright debt purchases to stabilise peripheral euro zone states' borrowing costs.

"It is quite disappointing ... There is a lack of any action so he has basically passed the buck back on to politicians. He hasn't come up with anything that the majority in the market had hoped for so I guess the market would be disappointed by this," said Ioan Smith, strategist at Knight Capital

Italian yields jumped 19 basis points to 6.12 percent while equivalent Spanish yields rose 7 basis points to 6.81 percent. Safe-haven German Bund futures rose 120 ticks to a session high of 144.70.

The FTSEurofirst 300 index index of top European shares extended losses and was last down 0.8 percent at 1,059.84.