Read on for a fascinating view into Pope Benedict's understanding of covenant theology. Scott Hahn also has a new book out on the subject: Covenant & Communion: The Biblical Theology of Benedict XVI. I haven't read it yet, but it comes highly rated.
The following paragraph taken from Pope Benedict XVI's introductory address on Monday, 6 October 2008, Address of His Holiness Benedict XVI at the Opening of the 12th Ordinary General Assembly of the Synod of Bishops, sets his understanding of covenant in perspective. [Emphasis mine]
The following verse says: "Omnia serviunt tibi". All things come from the Word, they are products of the Word. "In the beginning was the Word". In the beginning the heavens spoke. And thus reality was born of the Word, it is "creatura Verbi". All is created from the Word and all is called to serve the Word. This means that all of creation, in the end, is conceived of to create the place of encounter between God and his creature, a place where the history of love between God and his creature can develop. "Omnia serviunt tibi".
The history of salvation is not a small event, on a poor planet, in the immensity of the universe. It is not a minimal thing which happens by chance on a lost planet. It is the motive for everything, the motive for creation. Everything is created so that this story can exist, the encounter between God and his creature.
In this sense, salvation history, the Covenant, precedes creation. During the Hellenistic period, Judaism developed the idea that the Torah would have preceded the creation of the material world. This material world seems to have been created solely to make room for the Torah, for this Word of God that creates the answer and becomes the history of love.
The mystery of Christ already is mysteriously revealed here. This is what we are told in the Letter to the Ephesians and to the Colossians: Christ is the protòtypos, the first-born of creation, the idea for which the universe was conceived. He welcomes all. We enter in the movement of the universe by uniting with Christ.
One can say that, while material creation is the condition for the history of salvation, the history of the Covenant is the true cause of the cosmos. We reach the roots of being by reaching the mystery of Christ, his living word that is the aim of all creation.