German President Christian Wulff has announced his resignation amid a home loan scandal involving him.
The developments of the past few days and weeks have shown that (the German people's) trust and thus my effectiveness have been seriously damaged," Wulff said at a brief news conference on Friday.
"For this reason it is no longer possible for me to exercise the office of president at home and abroad as required," he told reporters.
Anticipating the resignation, Chancellor Angela Merkel had canceled a visit to Italy on Friday, where she was to deal with the Eurozone debt crisis.
Merkel, who proposed Wulff as the party's candidate for presidency two years ago, said in a brief statement that followed Wulff's press conference that she "deeply regrets" his decision.
Wulff came under immense pressure on Thursday, after prosecutors called on the parliament to lift his immunity from prosecution.
Germany's top-selling newspaper alleged in an article published on December 13 that Wulff received a home loan at cheap rates from the wife of a wealthy businessman friend when he was premier of the northern state of Lower Saxony.
Bild claimed last month that Wulff had personally threatened it with legal action if the story was published.
Wulff had already admitted he strayed from 'the straight path' in 2010 when he withheld information about the home loan from the state's parliament.
The scandal around Wulff, who belongs to the ruling conservative Christian Democratic Party, has become a major distraction for Merkel as she tried to focus on solving the euro zone debt crisis.
Although the president's role is mainly ceremonial, Germans take the office of president seriously.
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