BUDAPEST, Nov 8 (Reuters) -

The EU must focus on setting its own house in order, Italian

Prime Minister Giorgia Meloni said on Friday, citing tariffs,

competitiveness and defence as the most pressing issues the bloc

faces as it comes to terms with Donald Trump's election win.

Trump's

return to power

poses a major challenge for

the European Union as its leaders meet in Budapest

amid uncertainty in a continent that is struggling to find

unity, with two of its biggest powers, Germany and France,

politically weakened.

Meloni is seen as a potentially strong partner for Trump

given her conservative credentials and the overall stability of

the right-wing coalition she headed in Italy since 2022.

"Don't ask what the U.S. can do for you, ask what Europe

should do for itself," she told reporters ahead of the EU

leaders' meeting in the Hungarian capital.

"Europe must find a balance... I'm thinking of the

issues of competitiveness, tariffs...," she added.

Meloni also said she considered Tesla CEO and Trump-backer

Elon Musk a person with "added value" and a good interlocutor.

She held a phone conversation with Musk following Trump's

victory in Tuesday's U.S. presidential election.

The EU summit will include a debate on competitiveness,

which Meloni called "particularly important", and a presentation

on the issue by former European Central Bank chief Mario Draghi.

"We know what we have to do, the big question we have to

answer now is whether we really want to give member states the

tools to meet the objectives," she said.

On Thursday,

Italian ministers called on the EU to support members

in their effort to meet a NATO spending target of 2% of

gross domestic product (GDP) in defence.

During his first term, Trump insisted NATO members

should achieve the goal but Rome remains far from it, as it

grapples with high public debt which severely limits its

spending options.

Meloni said that EU fiscal rules should allow more

leeway for defence investment.

"New resources must be found for choices that are

strategic, which I agree with, (but) we must also say how we can

help member states to find those resources."