Published by Global Banking & Finance Review®
Posted on February 19, 2025
2 min readLast updated: January 26, 2026
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Denmark will increase its military budget by 50 billion crowns to address defence gaps, focusing on swift procurement amid global tensions.
By Stine Jacobsen and Jacob Gronholt-Pedersen
COPENHAGEN (Reuters) - Denmark will increase its military budget by a combined 50 billion crowns ($6.99 billion) this year and next to address acute shortcomings, most notably in surface-to-air missile defence systems, the prime minister said on Wednesday.
After decades of drastic cuts in defence spending, Denmark last year allocated an extra 190 billion crowns for its military over a 10-year span, but has now concluded that more is needed and that it must come quickly.
"Does the world look uneasy? Yes. Is there reason to believe it will be over soon? No," Prime Minister Mette Frederiksen told a press conference. "There is one message for the chief of defence: Buy, buy, buy."
She said procurement would be made without going through the normal lengthy tender procedures.
"If we can't get the best equipment, buy the next best. There's only one thing that counts now and that is speed," Frederiksen said.
Frederiksen on Monday said Russia had become a threat to all of Europe and called on each country to ramp up defence spending to protect themselves while also increasing their support for Ukraine.
Denmark and most other NATO members have also come under increased pressure from U.S. President Donald Trump to ramp up military capabilities further.
Defence Minister Troels Lund Poulsen said Denmark's increase will lift overall military spending to 3.2% in 2025 from 1.37% in 2022, the year that Russia launched its full-scale invasion of Ukraine.
The investments will weaken Denmark's public sector fiscal balance, going from a sizeable surplus in recent years to a potential deficit in 2026 of 0.8% of GDP, a government forecast showed.
While Denmark is among the biggest contributors of military aid and equipment to Ukraine relative to the size of its economy, the aid has depleted its own ground forces which lack hardware, ammunition and staff.
The long period of downsizing of domestic forces means Denmark has no air defences and significant shortcomings in its naval capabilities, military experts and government officials have said.
($1 = 7.1496 Danish crowns)
(Reporting by Stine Jacobsen and Jacob Gronholt-Pedersen, editing by Anna Ringstrom)
The article discusses Denmark's decision to significantly increase its military budget to address defence shortcomings.
Denmark is increasing its military budget to address defence gaps and respond to global tensions, particularly the threat from Russia.
The increased military spending may lead to a fiscal deficit by 2026, shifting from a previous surplus.
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