In the picturesque setting of a Belgian castle, leaders from the European Union are gathering on Thursday to confront a series of formidable challenges. The 27-nation bloc is re-evaluating its diplomatic and trade strategies in light of antagonistic signals from U.S. President Donald Trump, China’s aggressive economic maneuvers, and the hybrid threats emanating from Russia.

Belgian Prime Minister Bart De Wever captured the sentiment of the moment during a preliminary meeting with European leaders on Wednesday. “We all know we must change course, and we all know the direction,” he remarked. “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 the EU navigates these turbulent waters, internal debates about the bloc’s future direction are coming to the fore. Thursday’s meeting is expected to lay the groundwork for proposals to be discussed at a larger summit scheduled for late March.

The historic 16th-century Alden Biesen castle, with its imposing drawbridge, sets the stage for what could be pivotal discussions. Here, the diverging visions for Europe’s path forward are becoming increasingly evident.

Leading a faction advocating for deregulation and stronger transatlantic ties are German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni. This group is pushing for a renewed relationship with Washington and is keen on securing trade agreements similar to the recent deal with the Mercosur countries in South America.

“We must deregulate every sector,” Merz emphasized on Wednesday, underscoring the urgency felt by some EU leaders to reinvigorate the bloc’s global economic standing.

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 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 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.

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 avoiding the economic revitalization and modernization 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 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, 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.

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Associated Press writer Sylvie Corbet in Paris contributed to this report.