NUUK, Greenland (TP)

With Russia’s invasion of Ukraine, several countries within the EU are receiving devastating economic punches.

Although located in the Arctic circle closer to north America than Europe, but linked through their position within the Danish Kingdom, 15% of Greenland’s total export is affected due to sanctions on Russia, the country’s Múte B. Egede, Greenland Prime Minister told Arctic Today back in June.

And that motivatesGreenland to be active in finding new markets to reduce the economic loss.

‘We’re trying to find new markets, so the negative effects can be as small as it can be,’ said Egede.

The country’s will to enhance new business relations and economic prosper appeals to the European Union, which will open a representative office in the capital of Nuuk this fall, Greenlandic broadcaster NRK reported on Monday.

‘Greenland is already an important partner for the EU today, but there is a potential to do more. We are excited to approach a closer and more practical corporation with Greenland,’ said Per Haugaard, the EU commission’s representative chief in Denmark.

Minerals on sight

A definite date for when the new office will open in Nuuk is unknown as the EU commission continues to search for available space in the capital.

A total of four people will operate the office once it is open. This includes an office chief and three policy staff members. One or two will be local Greenland-speaking people.

With a physical EU presence in Nuuk, new projects involving Greenland’s infrastructure and business sector will run more smoothly with funding from the EU, Haugaard said.

‘There will be daily contact. Our office can share information with residents of Nuuk and the rest of Greenland about what the EU is doing, and what possibilities they have if they want to receive supports for different activities. Greenland’s business sector can apply funding for projects,’ he said.

Of natural recourses, Greenland hosts many minerals and metals that the international market needs to produce technology. Mining opportunities are therefore of big interest.

‘This is where the EU has its expertise and can collaborate in specific projects to see, how we can extract minerals in the future in the most sustainable way,’ said Haugaard.

Greenland did not follow Denmark and parted ways with the old EU in 1985, but today, the country still has economic collaborations with the Union – mainly in the education- and fishing sectors.

In 2023, Greenland receives 218 million DKK from the EU. That will amount increase by 251 million DKK from 2024. The funding represents a large amount of Greenland’s total economy.

Independence with economic growth

For Greenland, targeting economic growth means more than a prosperous society. As a result of being part of the Danish Kingdom, Denmark pays Greenland a yearly financial grant that covers governmental administrative costs.

Once Greenland can cover the grant themselves, the road to independence will be much smoother. With greater international attention in recent years, Greenland is positioning itself as an emerging business partner for superpowers around the world.

Due to geographic proximity, the USA is among the top contenders for landing deals with Greenland, which could make the world’s largest island fully independent from Denmark which administrates foreign affairs and safety politics on behalf of Greenland today.

‘The United States is Greenland’s most important strategic partner,’ said Egede in June and added, ‘We should work hard to be mutually preferred partners in the Arctic.’

‘Trade between Greenland and North America is one of our central priorities,’ he said.

The US opened its first consulate in Nuuk back in 2020. Last year, Greenland agreed on a deal that secures them 61 million DKK with the US, to ensure “greater opportunities for a better economic partnership” between the two countries.