Denmark plans defence spend of $21 billion over next decade

By Jacob Gronholt-Pedersen and Johannes Birkebaek

COPENHAGEN (Reuters) - Denmark plans to invest 143 billion Danish crowns ($21 billion) in defence over the next 10 years, which combined with increased military aid to Ukraine will help it achieve NATO's spending target this year, its government said.

A founding member of the North Atlantic Treaty Organization, Denmark scaled back its military capabilities after the end of the Cold War in the early 1990s and has acknowledged major shortcomings in the ability to defend its territory and meet NATO commitments.

But in response to the Ukraine crisis, it pledged last year to permanently increase spending on defence and security to 2% of gross domestic product by the end of 2030, a key goal for NATO member states.

"We must, to a greater extent, be able to live up to the demands and expectations that NATO and its allies have for Denmark," Troels Lund Poulsen, acting defence minister, told a press conference. "This requires large investments in our armed forces to lift our share of the responsibility."

The plans were announced as the country's Prime Minister Mette Frederiksen has emerged as a serious contender to take over as NATO secretary-general, with incumbent Jens Stoltenberg due to step down in September.

An announcement last week that Frederiksen will visit U.S. President Joe Biden on June 5 added to speculation about her potential candidacy.

Denmark currently spends around 27 billion crowns per year on defence but will progressively increase this by up to 19.2 billion crowns ($2.8 billion) by 2033, beginning with an increase of 6.9 billion crowns next year.

It is also allocating an additional 21.9 billion crowns in military aid to Ukraine over the next five years, which will propel Denmark's total defence spending to 2% of GDP this year and next.

However, the country will only permanently meet NATO's target in 2030, the government said.

The proposal will set the overall framework for defence spending, during which time decisions on actual military procurement will be agreed.

($1=6.7638 Danish crowns)

(Reporting by Jacob Gronholt-Pedersen and Johannes Birkebaek; Additional reporting by Louise Breusch Rasmussen; Editing by Andrew Heavens and David Holmes)