The future of the euro zone is dependent on a common commitment to solid government finances, says Commerzbank's chief economist, and France's new president-elect does not bring the bloc any closer to achieving this reality.
The pro-EU and centrist candidate, Emmanuel Macron, stormed to victory against his far-right political rival, Marine Le Pen, on Sunday and is now poised to become France's youngest ever premier.
However, the former economy minister is in favor of joint bond issuance which, according to Jörg Krämer, would sharply reduce each euro zone government's motivation to pursue sensible fiscal policies.
"The EU can't keep feeling its way from one election to the next. At some point an election might go the wrong way – and if that happens in a large country, the survival of the monetary union would be in jeopardy," Krämer said in a note.
Commerzbank's chief economist also warned the repeated near misses of anti-EU political leaders in several European elections in recent years would not last forever and suggested the monetary union's survival now rests on the bloc's ability to create a genuine banking union.
"To lay these existential risks to rest, the euro zone at long last needs a common commitment to solid government finances. The monetary union's long-term survival depends on it. But new French President Macron won't bring this any closer to reality," he added.