Germany's President Resigns in Scandal

By WILLIAM BOSTON

BERLIN—German President Christian Wulff resigned on Friday, bowing to enormous pressure in the wake of a string of disclosures over his personal financial dealings and acceptance of financial favors from political backers that prompted prosecutors this week to seek to strip him of presidential immunity and open a criminal investigation.

German President Christian Wulff .

Mr. Wulff's resignation is the final act in a political drama that opened in December, when it emerged that while serving as governor of the state of Lower Saxony he accepted a large low-interest loan from the wife of a wealthy businessman in 2008 to finance the purchase of a home for his family. In the subsequent two months, numerous allegations have surfaced that Mr. Wulff routinely accepted gifts, paid vacations, and financial favors from businessmen and political backers.

Speaking to reporters at the Bellevue Palace alongside his wife, Bettina, who was dressed in a conservative black skirt and jacket with white trim, Mr. Wulff said Germany needed a president who could commit his undivided attention to the great challenges facing the country and one who enjoys the trust of the citizens.

"The developments of the past days and weeks have shown that this trust, and therefore my ability to act, has been significantly damaged," a somber Mr. Wulff said. "For this reason it is no longer possible for me to fill this office in the way that is required."

The resignation of another president of her choice, the second in two years, leaves Chancellor Angela Merkel embarrassed and scrambling to find a new candidate. But this time she will have much less influence over the election, as her majority in the Federal Assembly, a combination of the Bundestag, or lower house, and representatives elected by the Bundesrat, or upper house, has faded to just a few votes. As a result, Ms. Merkel acknowledged Mr. Wulff's resignation and immediately reached out to the opposition to seek a consensus candidate to succeed him.

"We want to hold talks in this situation with the goal of proposing a joint candidate for the election of the next president of the Federal Republic of Germany," Ms. Merkel told reporters.

The affair also threatens to distract Ms. Merkel from focusing on resolving the lingering euro-zone debt crisis. Ms. Merkel abruptly called off a planned trip to Rome on Friday morning to meet Italian Prime Minister Mario Monti for talks about the euro crisis to instead control the political damage from Mr. Wulff's long-expected but nevertheless abrupt resignation.

Despite the obvious setbacks, the affair hasn't damaged Ms. Merkel personally. Through her deft handling of the situation—seeming to back Mr. Wulff, yet never tying her flag to his mast—Ms. Merkel has managed to ensure that the affair remain Mr. Wulff's problem. The affair also comes at a time when Ms. Merkel has never been more popular with voters, largely because German voters are overwhelmingly satisfied with her handling of the euro-zone debt crisis. A recent Politbarometer survey, published by German broadcaster ZDF, showed that 69% of Germans polled approved of her handling of the debt crisis, while 23% disapproved. In the broader personal approval ratings, 77% of Germans polled said Ms. Merkel is doing a good job, while 19% disapprove.

"The Wulff affair has not damaged her," said Oskar Niedermeyer, a political scientist at Berlin's Free University. "She is more popular today than at the start of the center-right coalition."

The office of the German president is a largely ceremonial job. The president has the responsibility to sign legislation before it becomes law and has the power to dissolve parliament under certain circumstances. But the president is mainly seen as the country's moral compass and representative to the outside world.

Mr. Wulff was a career politician who served as governor of Lower Saxony state and a senior official in Ms. Merkel's Christian Democratic Union party and as such a controversial choice for the job. He was long a serious rival to Ms. Merkel and her decision to appoint him after the unexpected resignation of Horst K?hler in 2010, led analysts to surmise that she was trying to neutralize a political opponent.

Horst Seehofer, president of the upper house of parliament, will take over the job of president for an interim period until a successor is found. Past candidates under discussion have included Norbert Lammerts, the outspoken president of the Bundestag; Ursula von der Leyen, the German Minister of Labor; and Klaus T?pfer, a former head of the United Nations environment program. All three candidates are conservatives, however.

Thomas Oppermann, the chief whip in the Bundestag for the opposition Social Democrats, welcomed Ms. Merkel's offer to hold talks, but warned the chancellor that the next president must be acceptable to all political parties.

"We have to find a common multiparty candidate who can re-establish the dignity of this office," Mr. Oppermann said in a statement.