He doesn't just mean that the Catholic has now come to terms with the reformation and the enlightenment, but that it has done so and purged them of their errors.
Given his reputation as an enemy of the enlightenment and all that the council stood for, is this remotely credible?
At the council, he said in a speech on his visit to Portugal,
"The church, on the basis of a renewed awareness of the Catholic tradition, took seriously and discerned, transformed and overcame the fundamental critiques that gave rise to the modern world, the Reformation and the Enlightenment. In this way the church herself accepted and refashioned the best of the requirements of modernity by transcending them on the one hand, and on the other by avoiding their errors and dead ends."
On one level, this is quite simply breathtaking. The Roman Catholic church has a capacity rivalled only by the Conservative party's for keeping the words of its formulae the same and reversing their meaning.
But to claim that 500 years of struggle against the modern world have ended with the church's accepting all the good bits and the rest of us trapped in errors and dead ends is startling even for a pope; and especially this one.
The Tablet, reporting this, managed in an entirely deadpan way to point out that Benedict is the pope who has done most to restore the Latin Mass, which the council had abolished, and to reach out to the Lefevrists who left the church because they would not accept the Council's reforms.
But Benedict is a subtle thinker, and it's always worth reading his speeches carefully. In Portugal he talked a lot about life in a multicultural world:
"Given the reality of cultural diversity, people need not only to accept the existence of the culture of others, but also to aspire to be enriched by it and to offer to it whatever they possess that is good, true and beautiful."
Talking to reporters on the plane which carried him to Portugal he tied the two strands of multiculturalism and enlightenment together in a most unexpected way. In an excursus which must have given the reporters migraines, he started talking about the enlightenment concept of reason.
Instead, he said, the modern, secular idea of reason grew out of a dialectic with the church in which "unfortunately the prevailing tendency was one of opposition and mutual exclusion." That little word "mutual" is worth treasuring: it represents a pope admitting there was wrong on his side, too.
Dialectic does not just mean conflict. It is a word which implies that the conflict ends, to be replaced by another, and that this conflict has productive results.
The idea of the relationship between the church and the state as dialectical is a very long way indeed from the claim that there is no salvation outside the church.
But, he argued, if Europe thought it could do without religion, it was making a very damaging mistake, just as the church had done when it thought it could do without secularism:
"In the multicultural situation in which we all find ourselves, we see that if European culture were merely rationalist, it would lack a transcendent religious dimension, and not be able to enter into dialogue with the great cultures of humanity all of which have this transcendent religious dimension – which is a dimension of man himself. So to think that there exists a pure, anti-historical reason, solely self-existent, which is 'reason' itself, is a mistake; we are finding more and more that it affects only part of man, it expresses a certain historical situation but it is not reason as such."
That was the context in which he went on to say that the church itself was to blame for the child abuse scandals, and they could not be blamed – as many cardinals have tried to do – on the outside world: "we are seeing .. . in a really terrifying way that the greatest persecution of the church comes not from her enemies without, but arises from sin within the church, and that the church thus has a deep need to relearn penance, to accept purification, to learn forgiveness on the one hand, but also the need for justice."
And even if you find his talk of the dialectic bewildering, it's clear what he means by "the need for justice": there will be swift and decisive sackings.
Sure enough, when last week the German bishop Walter Mixa, whom Benedict himself had appointed in 2005, found his resignation accepted by the Vatican less than three weeks after he had offered it after accusations of hitting children and possibly sexually abusing them.
In a church that can take 500 years to admit that Luther was right, that's dazzling speed.
This is turning out to be a very much less conservative papacy than anyone expected.
SIC: TGUK