Blow for Merkel as scandal-hit president resigns

Chancellor Angela Merkel vowed Friday to find a cross-party candidate after Germany's president resigned over a corruption probe, dealing her a blow as she battles to lead Europe out of its debt crisis. Merkel announced talks with major political parties to find a consensus candidate to replace political ally Christian Wulff, who earlier stepped down after prosecutors sought the lifting of his legal immunity. "We want to hold talks with the aim of being able to propose a joint candidate for the next president of the Federal Republic of Germany," Merkel said expressing "great respect" but also "deep regret" over Wulff's decision. Prosecutors in Lower Saxony state where Wulff was formerly premier said late Thursday they had taken the unprecedented move of asking parliament to lift his immunity to probe allegations he had enjoyed favours from a film producer friend. Wulff, 52, said in a brief TV statement that he had made mistakes but had always been honest. He said Germany needed "a president that enjoys the trust of not only a majority, but a broad majority of citizens." "The developments of the last days and weeks have shown that this trust and therefore my effectiveness have been damaged," he said, with wife Bettina by his side. A member of Merkel's conservative Christian Democratic Union (CDU) party and her hand-picked choice as head of state, Wulff had endured a barrage of negative media coverage since December largely over his links with wealthy businessmen. It is the second time in two years that Germany's president -- who mostly plays a ceremonial role but also acts as a moral compass -- has quit early into the five-year term. Both Muslim and Jewish organisations were swift to react to the resignation of Wulff, who shortly after taking office had said that Islam was part of life in Germany, which has the largest Turkish community outside Turkey. The Central Council of Jews in Germany appreciated Wulff's engagement for "the rights of religious minorities and his special sensitivity in dealings with the darkest chapter of German history", its president Dieter Graumann said. And Merkel earlier applauded Wulff for making "clear that the strength of this country lies in its diversity." Merkel, who cancelled a trip to Rome Friday for eurozone crisis talks with Italian Prime Minister Mario Monti, said she would first speak to government parties and then the opposition to find a replacement. Both the opposition Social Democrats and Greens welcomed the offer. Talks are expected to kick off this weekend, according to coalition sources. Neither the lingering eurozone crisis nor the Wulff affair seem thus far to have dented the popularity of Merkel or her party with recent polls giving both a strong thumbs-up. "All in all, Christian Wulff's resignation should hardly have any impact on the current negotiations of the second Greek bailout package," Carsten Brzeski, senior economist at ING bank said. "However, domestic political pressure on Angela Merkel could increase again and will not make her life any easier," he added. Steven Bastos, a Genshagen Foundation political scientist, said Wulff's departure was "clearly a political defeat for Merkel." Spiegel news weekly, which in its online edition judged Wulff's resignation "correct because he has failed at setting an example", listed a handful of possible successors. They included former pastor and East German dissident Joachim Gauck, who was the main opposition candidate against Wulff in 2010, and current Finance Minister Wolfgang Schaeuble. CSU head Horst Seehofer, as head of the upper Bundesrat parliamentary chamber, will assume the presidential duties until a new incumbent is elected within 30 days by a body comprising MPs and other dignitaries. Wulff first landed in hot water when mass circulation Bild reported he had failed to declare a 500,000-euro ($660,000) home loan secured at an advantageous rate while Lower Saxony premier. He was then involved in a public spat with Bild after leaving a furious voicemail on the chief editor's phone amid claims he tried to gag publication of the story. Wulff's predecessor Horst Koehler abruptly resigned in 2010 over remarks appearing to justify the use of German military power to protect the country's economic interests.