Greece will have to leave EMU whoever is elected Europe's depression is spreading, the result of a triple-barrelled fiscal, monetary, and regulatory shock - the worst policy errors since 1931. All key measures of the eurozone money supply are contracting, in breach of the ECB's "twin pillar" mandate. This is what is killing southern Europe. Contagion from Greece has nothing to do with it. I write before knowing the outcome of Greece's election. For what it is worth, I doubt that Greece will elect a manipulator who knows he cannot tear up the bail-out Memorandum and keep the euro by holding Europe to ransom. The Bundesbank's Jens Weidmann could hardly have been clearer. "We must not allow any country to blackmail us," he said. If Syriza admitted that euro exit is the price that must be paid to restore sovereignty and a viable currency, one might cheer them on. What Alexis Tsipras invites is the worst outcome: rupture on hostile terms; a return to the Drachma without stabilisation support. He is trifling with his nation's fate. Ultimately, Greece will have to leave EMU whoever is elected. No government can carry out an "internal devaluation" for eight years, and nor should it try. But it matters a great deal for Greece how exit is negotiated. As for the threats of Mr Tsipras, they are by now empty. He does not have the means to pull the plug on monetary union, or Europe's banks, or anything else. Private investors have already lost 75pc of their loans to the Greek state, and what remains is trading at a default discount. German and Dutch leaders violated the sanctity of the Project irreversibly when they first latched onto the bogus narrative that Greece had failed to comply with the Memorandum. Perhaps they did not want to know that the Troika had mostly praised Greece's efforts. The convenient lie told investors that the creditor powers would wriggle out of their EMU responsibilities when push comes to shove. The eurozone has been trading like a fixed exchange- rate system ever since, and on that basis Spain, Italy and Portugal have overvalued D-Mark pegs of 20pc to 30pc. Bad pegs break. It is not contagion that investors fear. It is replication: slow death as one country after another grinds into debt-deflation. Citigroup says Italy's economy will shrink by 2.5pc this year and 2pc next year as austerity bites, pushing public debt to 137pc by 2014. Standard & Poor's says the Spanish property crash is only halfway, yet the damage to the banking system so far has already forced the state to seek a €100bn (£80.4bn) bail-out. Spanish banks must roll over €545bn in debts, yet they are running out of collateral to borrow from the ECB. The banks can no longer prop up the state, and the state can no longer prop up the banks, and global investors will fund neither. The fond wish of markets is that the ECB will act once Europe's leaders have sketched a "road map" for fiscal union at this month's summit. But it will disappoint. Token bond purchases by the ECB will not help at this late stage. Half measures will accelerate the crisis by pushing other creditors down the ladder. It will require monetary stimulus on a crushing scale to restore confidence, and arguably a pledge to do whatever it takes to cap real Italian and Spanish bond yields at 3pc. Not even the agile Mr Draghi can hope to extract this much from the men in Frankfurt. The impasse is total.