It's a situation that calls for a level-headed decision.

Literal

Calm judgment [object-を] necessity-as [adjectival-な] situation [copula-である].

必要とする ('to need, require') with 必要 as the object of する — an idiomatic verb phrase. The relative-clause ~を必要とする ('requires X') modifies 状況 ('situation'). である is the formal written copula.