Bilzen-Hoeselt (Belgium): Leaders from across the European Union are meeting Thursday in a Belgian castle as the 27-nation bloc faces antagonism from US 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 with some European leaders 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.
But there are competing visions of how the EU must change. Thursday’s meeting is to shape proposals for another summit in late March.
As leaders are set to walk across a drawbridge to the 16th-century Alden Biesen castle, the fault lines in the battle for Europe’s future are becoming clear.
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 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.
Macron has urged the EU to protect its industries overall by applying European preference in key sectors like cleantech, chemicals, steel, the car industry and defence.
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 Organisation, 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 restriction 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 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.
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 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 Wednesday in the European Parliament in Strasbourg, France, and at the European Industry Summit in Antwerp, Belgium, 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.
