Greenland is at a pivotal moment, with Prime Minister Múte Egede’s government advocating for accelerated independence amid significant economic and strategic challenges. The island’s unique position as an Arctic gateway, rich in mineral resources and vital for climate research, places it at the heart of international interest, especially as climate change alters the region. As Greenland considers its future, it has several options: full independence, associated statehood, or shared sovereignty arrangements with Denmark, the US, and/or the EU.
One possibility is associated statehood, either with Denmark or the US. A new arrangement with Denmark could grant Greenland independence while preserving some financial support and rights for Greenlanders in Denmark. Alternatively, a free association with the US could provide economic benefits, security guarantees, and greater autonomy.
Another option is the co-sovereignty model, similar to Andorra’s arrangement, where two or more powers share sovereignty. This could balance Greenland’s desire for autonomy with the strategic interests of other Arctic nations.
Greenland could also maintain its current status within the Kingdom of Denmark, but negotiate for increased autonomy in specific areas, such as foreign policy. By leveraging its “Arctic advantage“, Greenland could gain more sovereignty in international Arctic forums, enhancing its global standing and decision-making power. Ultimately, Greenland’s economic landscape shapes the viability of these sovereignty options:
- Denmark provides annual support of approximately 3.5 billion kroner (US$525 million), which covers over half of Greenland’s public budget.
- The economy heavily depends on fishing and public sector jobs.
- Tourism and mineral resources, particularly rare earth elements, offer paths to economic diversification.
Greenland’s economic challenges hinder its independence aspirations. The country’s high unemployment and reliance on fish and shrimp exports, coupled with substantial Danish financial support, make its current economic model unsustainable. To achieve self-sufficiency, Greenland must diversify its economy and develop new revenue streams.
Given these challenges, a gradual transition towards greater autonomy, rather than immediate full independence, may be more beneficial. Associated statehood or co-sovereignty arrangements could provide a middle ground, offering Greenland greater autonomy while maintaining economic support and integration. A co-sovereignty arrangement with Denmark and the EU, or Denmark and the US, could be particularly advantageous, especially in the context of growing Great Power competition in the Arctic.
Greenland’s economic dependence on Denmark makes full independence possible but unlikely. A more feasible option is associated statehood, such as a Compact of Free Association (COFA) with the United States. This arrangement, already in place with the Federated States of Micronesia, the Marshall Islands, and Palau, could bring Greenland economic benefits, enhanced security, and greater strategic autonomy.
A Compact of Free Association (COFA) with the US could provide Greenland with substantial economic aid, including grants for infrastructure, education, healthcare, and environmental projects. Additionally, the US would assume responsibility for Greenland’s defense and provide funding grants, as well as access to US social services for Greenlandic citizens.
This would help diversify Greenland’s economy and reduce its dependence on Denmark. Integration into trade agreements like the United States-Mexico-Canada Agreement (USMCA) could also expand market access for Greenland’s fisheries and mineral resources in North America.
The US would assume responsibility for Greenland’s defense, protecting it against external threats in the sensitive Arctic region. Greenland would retain self-governance while leveraging US support to counteract influence from other powers like China or Russia.
The history of the West Indies Associated States (WIAS) offers valuable insights for Greenland. The WIAS model allowed smaller states to focus on domestic development while benefiting from external support. The WIAS model offered several benefits, including:
- Internal Autonomy: Full control over internal governance, allowing smaller states to focus on domestic development.
- Gradual Transition to Independence: Associated statehood served as a transitional phase, enabling states to build institutional capacity before achieving full independence.
- Regional Cooperation: The WIAS fostered regional collaboration, enhancing economic resilience and political coordination.
The WIAS experience highlights the importance of developing sustainable local economies and navigating relationships with major powers. Many states struggled with economic reliance on the UK, emphasizing the need for self-sustaining economies before full independence.
Associated statehood can serve as a transitional phase, enabling states to build institutional capacity before achieving full independence. However, it is crucial to balance this with economic development and strategic relationships.
Ultimately, the WIAS experience shows that associated statehood can be a stepping stone to full sovereignty, providing economic and strategic stability. This approach could be a viable option for Greenland as it considers a potential Compact of Free Association (COFA) with the US. If the Greenlanders agree to it.
A more unconventional approach to co-sovereignty could be inspired by Bosnia and Herzegovina’s three-member presidency. Greenland could consider a joint presidency shared between the EU, Denmark, and the US, with each entity holding a portion of the chief-of-state position. This arrangement would give all three entities a stake in Greenland’s governance, allowing them to counterbalance each other’s interests while also providing Greenland with a unique framework for managing its relationships with multiple powers.
Greenland’s potential association with the EU offers significant economic benefits. Continued Danish financial support during the transition period would provide stability. Access to EU structural development funds could enhance economic diversification.
Closer ties would also grant Greenland better access to European markets and investment. Additionally, a more robust framework for managing natural resource development could emerge. At a time of EU reform and possible reconfiguration, this opens up more options for Greenland to explore and establish a position of advantage for itself.
The economic turmoil caused by Brexit and the UK’s decoupling from the EU single market, as well as its declining global standing, underscore the importance of carefully managing key economic relationships while asserting sovereignty. It also highlights the need for careful calibration of investment promotion activities and policy.
From a strategic standpoint, Greenland’s balanced international stance would strengthen its position in Arctic governance. An enhanced voice in Arctic affairs, coupled with continued NATO security guarantees, would protect Greenland from undue influence by non-European powers. This could also bolster Greenland’s role in global climate change initiatives.
Politically, Greenland would maintain internal self-governance while sharing responsibility for external affairs with the EU. Representation in EU bodies would give Greenland a direct voice in European policy making. The connection to Danish institutions would be preserved, and Indigenous rights and cultural autonomy would be protected. This framework would allow Greenland to chart a course that balances its unique identity and interests with the benefits of closer European integration.
European microstates like Andorra, Liechtenstein, Monaco, San Marino, and Vatican City offer potential models for Greenland’s future relationship with the European Union. These microstates, despite their small populations and limited resources, have secured beneficial arrangements with the EU while maintaining their autonomy. They participate to varying degrees in EU systems like the euro, Schengen Area, and customs union.
Andorra provides a particularly relevant example. This sovereign microstate, located between France and Spain, operates under a unique co-principality system where the President of France and the Bishop of Urgell serve as joint heads of state. While maintaining its independence and representative democracy, Andorra has developed strong ties with the EU through several key agreements:
- The 1990 customs union agreement eliminated duties on industrial goods between Andorra and EU states, though agricultural products were excluded.
- A 2011 Monetary Agreement allowed Andorra to adopt the euro and align with EU banking regulations.
- Since 2014, Andorra has been negotiating an Association Agreement alongside Monaco and San Marino, aiming for broader access to the EU’s internal market. This culminated in an agreed text in December 2023.
These arrangements have enabled Andorra to:
- Participate significantly in the EU single market
- Align with EU standards in areas like environmental protection and financial services
- Receive technical support through EU programs
- Maintain sovereignty while benefiting from economic integration
For Greenland, Andorra’s experience demonstrates how a small territory can establish equitable and practical sovereign arrangements within a broader economic framework. In today’s multipolar world, participation in such a rules-based system offers clear advantages over isolation.
Negotiation Strategy & Implementation
Greenland possesses significant assets that it can leverage in negotiations over its future relationship with the EU and Denmark or other parties. Strategically, Greenland’s location is of critical importance. It controls key Arctic shipping routes and occupies a vital position in the Greenland-Iceland-UK (GIUK) gap, hosting important military installations. This strategic value gives Greenland substantial bargaining power.
Greenland also has abundant natural resources that could be of great interest to the EU and other global actors. Vast deposits of rare earth elements, potential oil and gas reserves, and rich fishing grounds represent economic opportunities that Greenland can use to its advantage in negotiations.
Furthermore, Greenland’s climate research value is growing in importance. Its essential role in global climate monitoring and key position for Arctic environmental studies make it a crucial player in international climate initiatives. This gives Greenland additional leverage as it charts its future course.
The transition to co-sovereignty between Greenland and whichever states it engages with should follow a phased approach. The first phase would involve negotiating a clear division of competencies, developing economic transition plans, and creating frameworks for resource management.
The second phase would focus on building the necessary governance structures and capacity for increased autonomy, as well as mechanisms for inter-state coordination. The final phase would entail the gradual transition of responsibilities, integration with EU institutions, development of resource management capabilities, and enhancement of Greenland’s international presence.
By leveraging its strategic location, natural resources, and climate research value, Greenland can position itself as a key player in these negotiations, ensuring that its unique interests and identity are protected as it explores closer ties with whichever global partner it seeks to work with.
Any agreement between Greenland and its partner states must include robust safeguards and protections to ensure Greenland’s interests are fully preserved. Key elements should include:
- Any agreement between Greenland, Denmark, and the European Union must include robust safeguards and protections to preserve Greenland’s interests. Key elements should include:
- Ironclad guarantees for the preservation and promotion of Inuit rights, traditions, and cultural autonomy. This includes protecting indigenous land rights, language, and self-governance over internal affairs. The agreement must enshrine these protections to ensure Greenland’s unique identity is fully respected.
- Minimum funding commitments from Denmark and the EU to provide economic stability and support Greenland’s development. Reliable streams of resources for infrastructure, social services, and economic diversification would be essential.
- Stringent environmental protections covering areas like resource extraction, shipping, and environmental impact assessments. Greenland must maintain a strong regulatory role to safeguard its sensitive Arctic environment.
- Robust dispute resolution procedures, including independent arbitration panels and clear escalation pathways, to fairly adjudicate any conflicts that may arise between the parties. This would help ensure issues are resolved transparently.
- Provisions allowing for periodic reviews and the ability to make adjustments over time. This flexibility would enable the relationship to evolve as circumstances change, ensuring Greenland’s interests remain protected in the long-term.
By embedding these critical safeguards and protections, Greenland can confidently explore deeper integration with Denmark, the EU or other states it chooses to partner, secure in the knowledge that its unique rights and environmental stewardship will be fully preserved.
Greenland’s future lies in co-sovereignty – a framework that would transform its relationships with Denmark and either the EU or US from dependency to strategic partnership. The Andorran model demonstrates how small territories can secure autonomy while benefiting from larger economic frameworks.
For Greenland, co-sovereignty offers three critical advantages. First, it would leverage Greenland’s strategic position and vast resources – from rare earth minerals to Arctic shipping routes – while ensuring these assets serve Greenlandic interests.
Second, it would maintain essential economic support while creating a clear path to greater political autonomy. Third, it would provide access to major markets and development opportunities while protecting Indigenous rights and cultural heritage.
The timing is opportune. Growing strategic competition in the Arctic, coupled with increasing demand for Greenland’s mineral resources, strengthens its negotiating position. A well-structured co-sovereignty agreement would allow Greenland to capitalise on these advantages while building crucial institutional capacity in areas like resource management and environmental protection.
Most importantly, this approach would give Greenland agency in shaping its future. Rather than remaining caught between competing interests or rushing toward premature independence, Greenland could secure beneficial partnerships while progressively expanding its autonomy. In an era of rapid Arctic change, this balanced approach offers the most viable path to sustainable development and meaningful self-determination.
