The island is not for sale, but targeted assistance to the mineral-rich territory could help the EU achieve strategic autonomy.
The scramble for Greenland is heating up, pitting the United States against China for influence in the giant, sparsely populated self-governing Arctic island which aspires to eventual full independence from Denmark.
The European Union could help prevent this struggle boiling over if it were willing to increase aid, help with institution-building and promote European investment in the mineral-rich territory, which voted in the 1980s to leave the European Economic Community in a dispute over fishing rights.
With a population of just 56,000, most of whom are Inuits, and a strategic location on the roof of the North American continent, Greenland is home to a vital U.S. early warning radar and satellite sensor station at Thule Air Base, with an airstrip long enough for strategic bombers and the world’s most northerly deepwater port.
“The United States thinks of Greenland strategically as the missing piece of North America,” says a military analyst for a Nordic government. “It doesn’t want to see China gain a foothold so close to the U.S. homeland.”
Greenlandic politicians are looking for new ways to boost revenue, notably from mining, fisheries and tourism.
Seen from Beijing, Greenland may offer the cheapest entry ticket into the Arctic on America’s doorstep. Most Greenlanders who are not on the subsidized public payroll eke a precarious living from fishing and hunting — both activities threatened by climate change.
Denmark currently covers more than half of the home-rule government’s budget, but Greenlandic politicians are looking for new ways to boost revenue, notably from mining, fisheries and tourism, that could one day make independence from the former colonial master economically viable.
Locally, the temptation to play off U.S., Chinese and Asian investors against each other is clear. A dearth of significant North American or European investment makes that quest more pressing.
U.S. President Donald Trump startled the international community last year when he proposed out of the blue to buy the island. Greenland’s autonomous government swiftly responded that it was not for sale and Danish Prime Minister Mette Frederiksen called the idea “absurd,” although U.S. President Harry Truman had secretly approached Denmark with a similar offer in 1946.
While Trump’s ill-prepared gambit drew ridicule, it revealed the depth of U.S. anxiety about the risk of Chinese inroads. It also reflected a desire to extract more strategic value in an era of mounting great power rivalry from a location that also houses Denmark’s small, overstretched Arctic military command.
The Trump administration followed up more diplomatically this year by opening a consulate in Nuuk and providing a $12.1 million aid package for Greenland. That’s less than a third of the EU’s annual assistance, but was announced with far greater political fanfare.
“The main change in the last couple of years has been that our ally, the United States, has increasingly identified China as its main strategic rival,” a senior Danish official said. “That has played fully through into the Arctic.”
China’s interest in the island “is not specifically military, but in the long term it would threaten the strategic interest of one of our partners,” the official said.
Washington leaned on Copenhagen last year to block Chinese companies bidding to upgrade the island’s only international airport and modernize other disused airstrips and develop a deepwater port to facilitate tourism. There are no roads or railways connecting settlements, and only a handful of hotels on the mountainous 2.16 million square kilometer landmass, about four-fifths of which is covered by a giant ice sheet.
Chinese firms have also sought licenses to prospect for rare earth elements in Greenland, believed to hold some of the largest deposits outside China, which produces some 70 percent of these minerals used in smartphones, fuel cells, batteries, magnets, plasma screens, fiber optics, lasers and medical imaging.
The Kvanefjeld site in southern Greenland contains an estimated 1 billion tons of mineralized ore, with significant quantities of both rare earths and uranium, making it even more sensitive due to the potential nuclear fuel use. A Chinese investor became in 2016 the largest shareholder in the Australian company that has explored Kvanefjeld and is awaiting a permit from the autonomous government to start mining.
Washington is exerting pressure on Copenhagen and the Greenland authorities to freeze Chinese investors out of developing the Kvanefjeld deposit on security grounds. The U.S. government has also pressed Denmark to exclude Chinese telecoms equipment provider Huawei from 5G mobile phone infrastructure in the Faroe Islands. Huawei is already providing infrastructure to upgrade Greenland’s offshore domestic telecoms cables and links to Canada and Iceland.
In trying to keep Beijing’s influence in check, the U.S. has been more successful in preventing investment in Greenland than promoting it. For now, Greenlandic leaders are pursuing a softly-softly approach to separatism, aware of their financial constraints. But it is not hard to imagine how things could escalate.
China has backed off tactically after running into resistance. But the Greenlanders will continue to seek money that would make statehood feasible. If U.S. and European aid and investment continue to fall short and tourism takes a durable hit from COVID-19, Beijing’s checkbook diplomacy could get a second chance.
Would the U.S. stand by and watch Greenland go independent under Chinese influence without intervening?
The EU could help head off such a stark choice if it were willing to invest a fraction of the assistance and technical support that it provides to developing countries in Africa and other continents where it has strategic interests.
For now, Brussels doesn’t even have a representative in Greenland, although the Greenlandic self-rule government maintains a small office in the EU capital. The EU provides about €32 million a year in assistance, mostly for education, plus an annual payment for access to Greenland’s fishing waters.
Greenland was the first relative in the European family to turn its back on the European Economic Community.
Since the COVID-19 crisis, the Commission has woken up to the EU’s vulnerability to monopoly suppliers of strategic minerals and other vital resources. Earlier this month, it published an action plan for securing, diversifying and recycling supplies of critical raw materials that will be essential to ensuring its transition to a carbon neutral economy.
That report does not even mention Greenland, because it is not part of the EU, although it is an autonomous part of a member state.
This highlights why helping Greenland is such a hard sell in Brussels. It was the first relative in the European family to turn its back on the European Economic Community, in 1985, when it voted to leave in a miniature forerunner of Brexit.
The EU needs to think strategically and set aside any bitter memories. If Brussels can deploy its development tools, including funding from the European Investment Bank, and activate a European industrial alliance to extract crucial raw materials, Greenland could be a building block in Europe’s quest for greater strategic autonomy.
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