European Union leaders have convened at a historic Belgian castle to confront a series of formidable external pressures, prompting a fundamental re-evaluation of the bloc's diplomatic and trade strategies.
The 27-nation alliance faces antagonism from Donald Trump, aggressive economic tactics from China, and persistent hybrid threats from Russia.
The urgency for change is palpable, yet the path forward remains contentious.
Belgian Prime Minister Bart De Wever said: "We all know we must change course, and we all know the direction. 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."
As leaders gathered at the 16th-century Alden Biesen castle, crossing its drawbridge, the deep divisions over Europe's future became starkly apparent.
Competing visions for the bloc's evolution are now at the forefront of discussions.
A prominent faction, led by German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni, advocates for significant deregulation, a renewed relationship with Washington, and the pursuit of new trade agreements, such as the recent deal with South America's Mercosur nations.
This meeting aims to forge proposals for a subsequent summit scheduled for late March.
“We must deregulate every sector,” Mr Merz said on Wednesday.
But they are at odds with France.
One key issue is how much of the EU's defence spending should be restricted to buying from EU arms companies.
French President Emmanuel Macron argues that EU companies should get priority, while Merz and Meloni say purchases should be from both foreign and European firms.
Mr 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,” Mr 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 Organisation,” Mr Macron said.
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.
Mr 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.”
Mr Merz and Ms Meloni are avoiding the economic revitalisation and modernisation strategy called for by Mario Draghi, former head of the European Central Bank: deregulation, diversification of trade ties, deep investment in infrastructure, and regulatory integration and simplification across the bloc.
On Thursday, Germany and Italy will 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 Mr Merz 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.
In speeches on Wednesday in the European Parliament in Strasbourg, France, and at the European Industry Summit in Antwerp, Belgium, Ms von der Leyen said economic strength underlies everything else.
“Our power on the global stage depends greatly on our strength on the economic front,” she said.
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.
Ukraine war latest: Putin’s forces knock out power in Odesa as thousands without heat
Court orders investigation into China-owned chipmaker
Is this when Europe pulls away from Trump to see off Russia’s war against Ukraine?
Pam Bondi slammed as DOJ accused of tracking lawmakers who view Epstein files
Starmer and Burnham hit out at Ratcliffe in escalating row - latest
