US To Increase Control in Greenland Despite European Opposition

• The U.S. Trump administration's renewed claims on Greenland following its January 3 strike on Venezuela have prompted European leaders to state that Greenland's future must be decided by Greenland and Denmark alone. The scene is now set for rising and persisting tensions over the future of the island for the foreseeable future, but BMI analysts believe the end result could be greatly increased U.S. control of Greenland.
• The U.S. appears serious about its determination to gain de facto and/or de jure control of Greenland. Last week, France, Germany, Italy, Poland, Spain and the United Kingdom issued a statement expressing support for Copenhagen and Greenland amid U.S. threats. Trump has said that if the US does not control Greenland, where it already has a military base, it will be subject to greater influence from countries such as Russia and China.
• Greenland's significance stems from its position along the principal air corridor between the US/North America and Europe/Russia, and it lies along the shortest flight path for intercontinental ballistic missiles that could be launched between the U.S. and Russia. More recently, Greenland has attracted growing attention due to its vast mineral resources, while the Arctic region has gained greater importance for Russia and Mainland China as a possible shipping route (the Northern Sea Route/Polar Silk Road) between Europe and Asia as a result of warmer temperatures.
• If the U.S. receives enhanced control of Greenland, it will be viewed negatively by Russia and China. This would also be an extreme geopolitical shock for the North Atlantic Treaty Organisation (NATO), given that its most powerful member would have attacked another member.
• This would most likely mean the end of NATO in its current form. It would create a profound crisis in Transatlantic relations and could open schisms within NATO and the European Union (EU) between European countries which value their alliance with the U.S. more than their alliance with fellow NATO/EU members.
• That said, the rise in geopolitical tensions has not yet materially spooked investors. The benchmark EURO-STOXX 600 equity index has been mostly trading flat since President Trump's latest posturing, a fact that was likely also aided by a toning down of rhetoric by US Secretary of State Marco Rubio to the effect that the U.S. could 'buy' Greenland rather than seize it. The government of Greenland, however, has firmly rejected threats from United States President Donald Trump, stating that it will not accept a US takeover under “any circumstance”.

(Sources: BMI, A Fitch Solutions Company & Al Jazeera)