Pope Benedict XVI said that it was OK for Catholics to accept Luther’s idea that we are justified by faith alone–depending upon what you mean by “faith alone.” Zenit has the text of his remarks.
The wall — so says the Letter to the Ephesians — between Israel and the pagans was no longer necessary: It is Christ who protects us against polytheism and all its deviations; it is Christ who unites us with and in the one God; it is Christ who guarantees our true identity in the diversity of cultures; and it is he who makes us just. To be just means simply to be with Christ and in Christ. And this suffices. Other observances are no longer necessary.
That is why Luther’s expression “sola fide” is true if faith is not opposed to charity, to love. Faith is to look at Christ, to entrust oneself to Christ, to be united to Christ, to be conformed to Christ, to his life. And the form, the life of Christ, is love; hence, to believe is to be conformed to Christ and to enter into his love. That is why, in the Letter to the Galatians, St. Paul develops above all his doctrine on justification; he speaks of faith that operates through charity (cf. Galatians 5:14).Paul knows that in the double love of God and neighbor the whole law is fulfilled. Thus the whole law is observed in communion with Christ, in faith that creates charity. We are just when we enter into communion with Christ, who is love….
At the end, we can only pray to the Lord so that he will help us to believe. To really believe; belief thus becomes life, unity with Christ, the transformation of our life. And thus, transformed by his love, by love of God and neighbor, we can really be just in the eyes of God.
Paul McCain rightly notes that he’s just repeating the traditional Catholic opposition to Luther. Where Luther said our justification is through faith in Christ, and is an alien righteousness, his righteousness, Pope Benedict XVI says with Trent that we are justified by something in us, by our cooperation with God, by our love. He quotes the “Apology of the Augsburg Confession”:
… They say that these passages of Scripture (that speak of faith) ought to be received as referring to faith that has been formed (fides formata). This means they do not credit justification to faith in any way, but only to love. . . if faith receives forgiveness because of love, forgiveness of sins will always be uncertain, because we never love as much as we ought to. Indeed, we do not love unless our hearts are firmly convinced that forgiveness of sins has been granted to us. . . We also say that love ought to follow faith . . . yet, we must not think that by confidence in this love, or because of this love, we receive forgiveness of sins and reconciliation, just as we do not receive forgiveness of sins because of other works that follow. But forgiveness is received by faith alone. (Apology of the Augsburg Confession IV.110ff; Concordia, p. 100).