German Chancellor Angela Merkel's decision not to seek a fifth term is rocket fuel for European markets, according to CNBC's Jim Cramer.

European stocks rallied on Monday as Merkel confirmed at a news conference she would not be seeking any political posts after her current term ends in 2021. She also said she won't stand for re-election as chair of her party in December.

In a Monday morning tweet, Cramer acknowledged that Merkel is still "loved by many" across Europe but argued she has been "a leader of the anti-growth coalition."

I know Merkel is loved by many but she has been a leader of the anti-growth coalition that is worried more about Weimar than about avoiding the next recession. That's why this move caused Europe to rocket.

The host of CNBC's "Mad Money" was referring to the Weimar Republic, whose instability and hyperinflation helped give rise to Hitler in the 1933.

While no one expects any return to such dark days, Cramer argues that Merkel has been too focused on avoiding the mistakes of the past by promoting prudence and austerity.

Any eventual change in political direction for Germany could lead to a relaxation of spending policies and a boost for large corporations in the region.

Merkel has been chairwoman of her party since 2000 and chancellor since 2005. Her announcement on Monday came a day after a disappointing regional election in the state of Hesse.