Prime Minister Mette Frederiksen announced that Denmark supports increasing defense spending to 3.5% of its Gross Domestic Product (GDP) to meet new NATO targets. In addition, countries must allocate 1.5% of GDP to other security expenditures, including cybersecurity and border security.

The Prime Minister acknowledged the significant financial commitment required to meet these goals, stating, “This is going to be really expensive. It is already very expensive.” The government plans to present an economic plan in the autumn detailing how Denmark will achieve these new NATO strength targets.

Economist Niels Storm Knigge of the think tank Kraka, echoed the Prime Minister’s sentiment, calling it “a fairly significant draw on Danish economic resources.” Knigge estimates that meeting the new NATO targets could require Denmark to invest the equivalent of two complete metro constructions annually.

According to Knigge’s calculations, raising spending from 2% to 5% of GDP would mean an increase of approximately DKK 90 billion per year in defense and security spending. He notes that investments in roads and infrastructure could contribute to reaching the target.

Despite the increased spending, Knigge believes Denmark can avoid implementing new taxes, like a security tax, due to the country’s improved public finances.