Shortly after Philippe's appointment, Macron was scheduled to travel to Berlin on his first foreign trip as French leader.
Last week, Merkel's spokesman Steffen Seibert had said on the subject of euro bonds: "I can tell you that the federal government's dismissive attitude toward euro bonds remains valid", when asked if Germany would back Macron should he push for the creation of such financial instruments.
Appointing Philippe could tick several boxes for 39-year-old Macron, France's youngest president, who took power on Sunday.
Mr Philippe's age reinforced the generational shift in France's corridors of power and the image of youthful vigour that President Macron is cultivating.
Having already made conservative Edouard Philippe, a member of The Republicans (LR) party, his prime minister earlier in the week, Macron picked Bruno Le Maire a pro-European, German-speaking rightist, also from The Republicans, as his economy minister.
Chancellor Angela Merkel hosts new French President Emmanuel Macron in Berlin on Monday for talks in which they will seek to reinvigorate the Franco-German relationship and the troubled European project that it underpins.
Macron is counting on winning votes from centre-right supporters in the legislative elections next month.
Baroin is leading LR's campaign for the parliamentary elections, which will be key for his party's future as well as Macron's chances of carrying out his pro-business, pro-EU policies.
But not everyone was pleased with Philippe's announcement.
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Meanwhile the Front National are forecast to return 40 MPs in the upcoming vote following Ms Le Pen's success in reaching the second round of the presidential race.
That the new prime minister was a member of the Republicans, the mainstream right, "is the demonstration that (the Republicans) can not symbolize an opposition worthy of the name", Le Pen said in a statement.
The populist Le Pen, who has not been seen since her May 7 defeat to Macron, is to announce by week's end whether she'll run for a parliamentary seat.
French far-left leader Jean-Luc Melenchon, who won almost 20 percent of the vote in the first round of the presidential election, also reacted with hostility.
Juppe said he would be backing LR lawmakers in the mid-June elections, and not Macron's candidates.
But over 20 LR members of parliament, including some party heavyweights and former ministers, issued a joint statement on Monday urging the party to positively respond to the "hand extended by the president".
The new prime minister is also a keen amateur boxer, has written two crime thrillers, and has a strong interest in war-time British prime minister Winston Churchill. "Don't give full powers to Mr. Macron and his prime minister".
French President Emmanuel Macron says he wants a Europe that is both more conducive to investment and more protective of workers. Macron previously met Merkel when he visited Berlin in March as a candidate.
The 28-nation European Union faces complex divorce proceedings with Britain, its current No. 2 economy. He has also promised a tough line on Britain as it negotiates its departure from the European Union, to deter others from trying to leave after debt and migration crises that have eroded public support for the bloc.