Remember, Ratzinger was living in Germany at the time and was a member of the Hitler Youth (as required) and drafted into the Army from the seminary. If as Pope he is trying to say that the Nazi regime was atheistic, he will need to explain his own experience.
See, that's the thing - the Nazis were definitely
not atheistic, and the evidence of that fact abounds, from
Mein Kampf to basically all of Hitler's speeches to the Nazi army uniform which included a belt buckle that said (translated) "God with us." The Nazi persecution of the Jews was a direct ideological descendant of Martin Luther, founder of Protestantism and author of
On the Jews and their Lies.
It is completely and utterly impossible to look at the characteristics of the Nazi regime and claim that it was atheistic - you might as well claim that Saudi Arabia has an atheistic regime.
Even as a person who directly experienced life under the Nazis, Ratzinger's personal testimony as to whether or not the Nazis were atheistic would have less evidenciary significance than the
actual writings and words of Hitler himself. In fact, with the
theism of the Nazis so blatantly obvious in all of their material, I would sooner believe that Ratzinger was
lying than believe the Nazis were atheist - 30 seconds on Google and YouTube would provide me more than enough evidence in direct quotes from Nazi speeches and excerpts from Hitler's writings to show that the Nazis were fundamentally Christian beyond a reasonable doubt.
The only legitimate "atheist extremism" of the 20th century would be communist China and Russia, both of whom embarked on well-known programs to purge religion (other than worship of the state) from their respective populations. Even then, "atheist extremism" would be debatable as atheism was not the point or the inspiration, but rather the removal of competing authority figures for the Party and State.
This isn't to say that the Third Reich didn't have issues with Catholicism, but surely he understands the difference between being an atheist and being of a different religious bent.
At first the Catholic Church
supported Hitler as a "defense" against the Evil Atheist Communists of Russia, who were coming to eat their children. Or something. Opposition to Hitler only came later.