The 85-year-old pontiff announced his abdication as leader of the world's 1.2 billion Catholics in a speech delivered in Latin to cardinals meeting on Monday (11 February) in the Vatican's Apostolic Palace.
"I have come to the certainty that my strengths, due to an advanced age, are no longer suited to the adequate exercise of the Petrine ministry," he said, referring to the tradition that dates the papacy back to Saint Peter, 2,000 years ago.
Merkel delivered a heartfelt reaction to the announcement.
“When Josef Ratzinger was elected as the head of the Catholic Church almost eight years ago, we in Germany were proud of our compatriot – the first in centuries to hold the post of Pope. We wished him well for his task,” Merkel said.
“If the Pope himself, after thorough reflection, has come to the conclusion that he doesn’t have the strength anymore to carry out his duties, then this has my utmost respect,” Merkel added.
As the global economic crisis unfolded, the Pope pushed for a social paradigm change by publishing a 150-page encyclical calling for a new economic order.
“He will be missed as a spiritual leader to millions,” Cameron said in an e-mailed statement. “He has worked tirelessly to strengthen Britain’s relations with the Holy See.”
"I deeply respect the decision of Pope Benedict XVI, immense and unexpected as it is,” Italian Prime Minister Mario Monti stated.
"I deeply respect the decision of Pope Benedict XVI, especially since it is not in line with tradition," said Van Rompuy in the shortest of his statements so far, adding: "His pontificate has been short but very difficult."
In a statement, Barroso expressed his respect for the work done by the Pope and his tireless support to the defence of ecumenical values, such as peace and human rights. "The spirit of reconciliation that led the thinking and action of the Holy Father must also be welcomed," Barroso said.
Only French President François Hollande took some distance, marking the fact that the French state keeps its distance from the church. “France recognises the decision taken by the Pope, but we don’t have more to say about something that is a church matter,” Hollande said.
The resignation shows “the unique pressures of spiritual leadership in the modern world,” said Irish Prime Minister Enda Kenny. “Pope Benedict has given strong leadership and great service to the church and her people.”
The Pope’s eight years in office were overshadowed by scandals ranging from the sexual abuse of children by priests to the arrest of his own butler for stealing confidential papal documents in the so-called "Vatileaks" affair.
Van Rompuy and Barroso, both Catholics, attended on 1 May 2011 the beatification ceremony of Pope John Paul II, while most EU heads of state chose instead to mark Labour Day.
As cardinals are preparing to come to Rome for the conclave, the succession debate has started and a new Pontiff is expected to be chosen by Easter.
Although half of the cardinals are from Europe, there is a sense that a non-European will be able to focus on issues closer to Catholics in developing countries.
Spanish-Latin American cardinals as well as those from the US have become increasingly powerful in recent years. With 42% of the world’s 1.2 billion-strong Catholic population living in Latin America two names being circulated are Odilo Sherer, archbishop of the huge diocese of Sao Paolo and Leonardo Sandri, a Vatican based Italian-Argentine archbishop.
Cardinal Peter Turkson from Ghana is also seen as a potential candidate
Some say Italian cardinals could have the advantage after two straight popes from outside the Catholic Church's home after centuries of Italian pontiffs. Angelo Scola, archbishop of Milan, is the name repeatedly mentioned.