Denmark is bracing for a substantial increase in defense spending to meet new force goals set by NATO, potentially requiring a comprehensive multi-billion dollar agreement. These expenditures come on top of existing Arctic build-up plans and support for Ukraine, placing significant strain on the nation’s finances. The Danish government is facing pressure to address these mounting costs, including air defense, naval upgrades, and F-35 fighter jets, amid concerns over outdated infrastructure and IT systems within the armed forces.
NATO’s new force goals, while classified, are expected to necessitate significant investments in air defense systems, potentially quadrupling current allocations. This could amount to a three-digit billion-dollar bill, alongside the acquisition of additional F-35 aircraft and the further development of a combat-ready brigade. The alliance’s requirements also extend to increasing the brigade’s readiness and sustainability, demanding more soldiers and larger stocks of essential supplies.
In addition to NATO requirements, Denmark is committed to upgrading its Arctic presence, focusing on enhanced surveillance of Greenlandic airspace and coastal waters. This includes plans for air surveillance radar, potentially supplemented by flight hours on Norwegian P8-Poseidon aircraft or the acquisition of its own. The government also faces a dilemma regarding American criticism of Denmark’s Arctic defense posture, with proposals ranging from a massive investment package to address US concerns to skepticism about underlying American intentions regarding Greenland.
The Danish Navy is also in need of significant upgrades, with potential investments in new frigates and replacements for aging inspection ships. The Navy has been under pressure and is facing challenges, including the need for a billion-dollar upgrade to existing air defense frigates to enable them to intercept ballistic missiles. This may also entail investments in more Seahawk helicopters with anti-submarine equipment.
Beyond military hardware, Denmark faces considerable expenses in modernizing its outdated defense IT infrastructure and addressing the deteriorating condition of its military buildings. Analyses have revealed that bringing the armed forces’ buildings up to an acceptable standard would cost almost DKK 27 billion, while modernizing IT systems could require between DKK 17.5 and 21 billion. Furthermore, the country’s helicopter fleet requires urgent attention, with two out of three types nearing the end of their service life, potentially necessitating a long-term double-digit billion investment in replacements.
The Danish government is grappling with how to finance these escalating defense costs, with economists suggesting that welfare spending may need to be reevaluated. The timing of these financial decisions is politically sensitive, coinciding with upcoming municipal elections, an EU presidency, and a looming parliamentary election. Despite the challenges, it is evident that defense will constitute one of Denmark’s largest individual state expenses in the foreseeable future.