I am well-aware the Catholic Church doesn't take the whole bible literally. But consider speeches like this:
It's clear that those events are meant in a literal way. There is no denying that.
So when you tell me that the Church teachs strictly about Faith and Morals, that is a claim that simply doesn't correspond to reality.
This is not about Papal Infallibility. This is about what the Church teaches.
Because we now know those events didn't transpire as depicted in the bible. So it is convenient to say that the scriptures don't mean they did happen. There is simply no room for them to be completely incorrect and misguided in essence. They must not be. Therefore, if any interpretation would lead one to that conclusion, they must be interpreted as not being literal.
I'm afraid that there is still a disconnect between our respective approaches to this issue.
Benedict XVI, contrary to your interpretation, is not speaking as to the historicity of the events of Exodus and whether they were written by their author with the intention of being a historical account - he is discussing the religious significance of the story in the history of God's relationship with the Jewish people and as a consequence to Christians, the divine drama of faith rooted in a historical people, the Jews, and their covenant with God.
Where you are going wrong, is that you are confusing the religious reading with a discussion of the genre.
The Church has no authority to declare whether a text was written as a history or a fable or a myth or a parable - she has authority only over Faith and Morals. She must rely on scholarly expertise and knowledge of the literary norms of the period in question to arrive at a proper exegesis. This is is precisely what the Divine constitution, Dei Verbum, calls Catholics to do - and it is the authoritative document of an ecumenical council.
And for Moses and the flood narrative, the relevant scholarship has established that these were not written as histories. That is not their genre. The Noah story is derived from poems written in Akkadian and Sumerian that form part of clearly fictional narratives that were popular literature in the culture of other Semitic peoples. The sacred authors drew on these tales to impart moral and religious truths revealed by God, according to our understanding. I'm failing to see why you don't get that it wasn't written as history, which means that while it is divine revelation and the religious significance is clear, we shouldn't treat it as history.
If Benedict XVI did think it was a historical account (which he didn't actually say in your quote, that's not what his purpose was), then that would be his personal opinion and certainly not binding on me or any other Catholic. The Church has no authority to determine these matters - its outside her remit, which concerns only Faith and Morals.
In this manner, the Church relies on critical scholarship to form a proper exegesis of the sacred text according to the genre, time period and intention with which it was written - which we cannot discern by osmosis but only through academic study.
It's not merely a case of we now know these events didn't happen - its what the original authors intended. And they didn't intend to write history, as evidenced by their reliance on earlier fables from surrounding cultures and literary motifs.
1 Maccabees (which is sacred scripture for Catholics, forming part of our Old Testament canon), by contrast, was written as a historical account of the Maccabean Revolt from whence the Jewish festival of Hanukkah originates and so I accept it as being such.
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