- Denmark is spending more political and military capital to defend sovereignty over Greenland as independence sentiment rises and the U.S. renews interest in control.
- Keeping Greenland is costly for Denmark (about DKK 4.3bn in annual grants and close to US$1bn/year including policing, justice and defense) while Greenland’s economy remains weak (about 0.2% 2025 growth and a DKK 800m financing gap).
- Greenland’s Arctic location is central to NATO and U.S. missile warning and to competition with Russia and China, raising the stakes for Copenhagen and its allies.
- Denmark must balance upholding sovereignty and international law with a likely eventual separation, amid risks of Nuuk pursuing direct deals with Washington and pressure on NATO cohesion.
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Since 1979 Greenland has had increasing self-governance and all major Greenlandic political parties now support full independence, though diverge sharply on when and how that should happen. Denmark now faces pressure from two directions: external geopolitical threats and internal democratic momentum toward separation.
The external dimension includes U.S. President Donald Trump’s renewed proposals to purchase the territory or even use force, motivated by fears Russia or China might gain ground in the Arctic, and support from some in Europe for Denmark’s sovereignty. Denmark is responding with military investment—announcing a DKK 42 billion (~US$6.5 billion) Arctic defense package, expanding naval and aerial assets, as well as surveillance to shore up its presence.
Financially, holding on to Greenland costs Denmark nearly US$1 billion per year when considering block subsidies plus costs of policing, judicial, and defense systems. Greenlandic GDP growth is near 0.2% for 2025, and the territory has an annual financing gap of DKK 800 million, raising doubts about its capacity for sustained independence without external support.
Strategically, Greenland remains central to U.S. missile warning systems (Pituffik/PThule Base), Arctic access and influence; losing sovereignty would diminish Danish and European leverage in the high north. But reliance on geography alone is insufficient if Nuuk pursues direct bilateral relations, as some parties suggest bypassing Copenhagen in talks with Washington.
Key risks for Denmark include: expending political capital for a territory potentially moving out of its jurisdiction; setting an international precedent that territorial sovereignty can be compromised amid great power rivalry; burdening Danish taxpayers amid slow economic returns; and possible erosion of the NATO and international legal order if force or coercion re-enters discussions.
For Greenland, the path to independence is still constrained by limited fiscal autonomy, infrastructure deficits, dependency on Danish subsidies, and environmental/geographical challenges—especially given the technical and financial difficulty of exploiting resource wealth under climate-stressed conditions.
• Strategic implications: Denmark must consider whether its current path is sustainable—alternatives may include negotiating phased independence, international mediation, redefining Greenland’s foreign policy levers, or preemptively defining limits to U.S. or other powers’ influence.
• Open questions include: How will Greenland monetize its mineral and resource base under environmental constraints? How much military risk is Denmark willing to bear if challenged? Will Greenland seek separate defense or foreign affairs agreements? What role will European allies and international law play in preventing coercive claims?
Supporting Notes
- Greenland’s population increasingly desires independence; all major parties support sovereignty, differing only on timing and mechanism.
- Denmark provides ~4.3 billion DKK (~US$610 million) in annual block grants; total Danish spending on Greenland (including justice, defense, policing) approaches US$1 billion/year.
- Greenland’s GDP growth was approximately 0.2% in 2025; its public finances face an annual deficit of about DKK 800 million.
- Denmark announced a DKK 42 billion (~US$6.54 billion) Arctic defense package to address U.S. criticism over its defense posture in Greenland.
- Greenland is strategically located for NATO and U.S. missile defense systems; Democrats debate whether losing it would cost Denmark its geopolitical relevance.
- Denmark and Greenlandic leaders made joint statements on December 22, 2025 emphasizing sovereignty, international law, and that Greenland belongs to Greenlanders; Danish PM warned that a U.S. attack on Greenland could threaten NATO’s existence.
- All Greenlandic parties support independence; the largest opposition party reportedly wants to negotiate directly with Washington.
- Denmark’s foreign policy capital is being stretched defending Greenland, despite growing signs the relationship may end in separation.
- Denmark bears responsibilities for policing, justice and defense in Greenland, increasing its fiscal exposure beyond subsidies.