BILZEN-HOESELT, Belgium (AP) — Leaders from across the European Union are meeting Thursday in a Belgian castle as the 27-nation bloc faces antagonism from U.S. President Donald Trump, strong-arm economic tactics from China and hybrid threats from Russia — challenges that have prompted a rethink of Europe's approach to diplomacy and trade.
“We all know we must change course, and we all know the direction," Belgian Prime Minister Bart De Wever told a meeting of some European leaders on Wednesday. “Yet it sometimes feels like we’re standing on the bridge of the ship staring at the horizon without being able to touch the helm.”
There are competing visions of how the EU should navigate these troubled times. Thursday's meeting is to shape proposals for another summit in late March.
Before crossing a drawbridge to the 16th-century Alden Biesen castle, leaders told reporters they were focused on competitiveness and economic security.
“We need to continue our very proactive trade policy and protect our companies from unfair competition, from economic coercion,” said European Council President António Costa just before the meeting started. He highlighted energy costs and cutting bureaucratic barriers to trade.
There are clear fault lines in the battle for Europe’s future
German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni lead a wing of the bloc calling for deregulation, rebooting Europe's relationship with Washington and forging trade deals like the recent one struck with the Mercosur nations of South America.
“We must deregulate every sector,” Merz said Wednesday.
But they are at odds with France.
One key issue is how much of the EU's defense spending should be restricted to buying from EU arms companies. French President Emmanuel Macron argues that EU countries should buy exclusively from European producers, while Merz and Meloni say purchases should be from both foreign and European firms.
Macron has urged the EU to protect its industries overall via applying “European preference” in key sectors like cleantech, chemicals, steel, the car industry and defense.
“We need to protect our industry. The Chinese do it, the Americans do it too,” Macron said in an interview with several newspapers including Le Monde and The Financial Times published Tuesday.
Without some European preference on strategic sectors, “Europeans will be swept aside. This is defensive, but it is essential, because we are facing unfair competitors who no longer respect the rules of the World Trade Organization,” Macron said.
Facing the financial challenges of the US and China
EU leaders will also debate new financial instruments to protect the bloc in a global trading system rocked by Trump's blitzkrieg of tariffs and China's restricting of critical mineral exports.
Macron is renewing his call for the EU to be able to borrow money, which he described as “Eurobonds for the future" that would provide an opportunity “to challenge the hegemony of the dollar.”
Merz and Meloni are following an economic stimulus strategy called for by Mario Draghi, former head of the European Central Bank. The plan includes cutting regulations, making infrastructure investments and establishing trade ties with more countries. Draghi will address leaders assembled in the castle.
“We have way too many barriers that prevent money and capital from moving from one country to another, way too many obstacles to simplification,” said Roberta Metsola, President of the European Parliament. “No more words, but more action.”
Germany and Italy are expected to call on leaders to act by cutting EU red tape, strengthening the single market and “ensuring an ambitious trade policy based on shared rules and a level playing field.”
That echoes the economic security focus of European Commission President Ursula von der Leyen, who like Merz and Metsola is a leading figure in the European People's Party, which is the largest bloc in the European Parliament and claims 13 heads of EU states as members.
“Our power on the global stage depends greatly on our strength on the economic front,” she said in a speech Wednesday.
Citizens across the bloc are hungry for a stronger EU and a more unified, stronger and ambitious leadership amid military threats, economic pressures and climate instability, according to an official EU poll, Eurobarometer.
“There has never been a better time for European leaders, national political leaders, to actually leverage on these European citizens’ demand for greater European action,” said Alberto Alemanno, a professor of EU law at the HEC Paris business school.
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Associated Press writers Mike Corder in The Hague and Sylvie Corbet in Paris contributed to this report.
___ This story has been corrected to reflect the characterization of Merz’s and Meloni’s position on the 2024 Draghi report.
