Morning Must-Read: Martin Wolf: Europe Must Do Whatever It Takes

Martin Wolf: Europe has to do whatever it takes: “In the second quarter of this year…

…real domestic demand in the eurozone was 5 per cent lower than in the first quarter of 2008. The eurozone’s unemployment rate has risen by just under 5 percentage points since 2008. In the year to July 2014, consumer price inflation in the eurozone was 0.4 per cent…. The eurozone is in a depression; lack of demand has played a crucial role; and the European Central Bank has failed to deliver on its own price-stability target. This is not just sad. It is dangerous. It is folly to assume continued stability if economic performance does not improve. A necessary, though not sufficient, condition for grappling with these challenges is understanding them…. Mario Draghi… the one senior eurozone policy maker who shows a grasp of the issues, made a vital contribution at this year’s Jackson Hole symposium…. The capacity of the peoples of member states to tolerate high unemployment and deep slumps has been impressive. But it cannot be unlimited. If that is what the powers that be continue to advocate, the result will probably be a populist reaction…. Who is sure Marine Le Pen, leader of the far right National Front party, will not be the next president of France? Who would follow Matteo Renzi, Italy’s prime minister, if he failed? Yes, these member states need to act. But they surely need support. Mr Draghi has shown the way. The eurozone must follow.