Denmark announced plans to invest about $250 million in Greenland’s infrastructure, a move aimed at reinforcing ties with the Arctic island as U.S. President Donald Trump continues to push for its annexation.
Greenland, an autonomous territory within the Kingdom of Denmark, has recently become a focal point of geopolitical competition. Its rich mineral resources and strategic military location have drawn global attention, including that of the U.S. President Donald Trump, who has openly declared that he would invest “billions of dollars” and make Greenlanders rich if he succeeds in annexing the territory.
Denmark recently pushed back against suspected U.S. interference in Greenland. On August 27th, Copenhagen summoned the U.S. chargé d’affaires after reports emerged that American officials had been active in Greenland. Danish public television reported that at least three U.S. envoys were seen in the territory seeking information about sensitive historical disputes.
“We are aware that foreign actors continue to show an interest in Greenland and its position in the Kingdom of Denmark. It is therefore not surprising if we experience outside attempts to influence the future of the Kingdom in the time ahead,” Foreign Minister Lars Løkke Rasmussen said in a statement, confirming that he had summoned the U.S. representative for talks.
To fend off the U.S. threat, Copenhagen is pairing economic commitments with stronger military engagement. The Danish government is expected to unveil a proposal in the coming weeks for increased Arctic defense spending. This follows ongoing joint training exercises in Greenland this month, which bring together Denmark and several of its NATO allies with more than 550 personnel participating.
The latest initiatives build on a major defense agreement from earlier this year. On February 22nd, the Danish Government and the parties behind the defense agreement decided to accelerate the build-up of Danish Defense with an additional $7.9 billion allocated over 2025 and 2026. The plan will put Denmark above 3% of GDP in allocated defense spending. The agreement was concluded in the wake of intelligence assessments warning that Russia could regain sufficient military strength within two years to wage war against one or several NATO countries.
At the same time, Copenhagen is facing new pressure from Greenland’s own leaders for more substantial economic support. In August, Greenland’s government demanded increased financial backing, linking today’s economic challenges to a controversial birth-control campaign from the 1960s and 70s. Finance minister Múte B. Egede said Denmark carried “historic responsibility” for the island’s weak economy. According to Egede, the forced contraception policy created a demographic imbalance where too few workers must now support a growing elderly population.
With Greenland’s budget deficit expected to reach $118.8 million annually, Egede warned that reforms alone would not solve the crisis. He called on Copenhagen not just to raise subsidies but to invest directly in Greenland’s economy. Now Denmark is investing substantial amounts, which may have never happened if it wasn’t for Trump, as some believe the annexation threats were a way for the U.S. president to make Denmark increase defense spending to NATO benchmark level.
