A new proposal by the Danish government to establish a DKK50bn (€6.7bn) defence fund could be a prompt to create frameworks for the pension sector to contribute with private investments in defence, the country’s pensions lobby group has said.
Prime minister Mette Frederiksen yesterday confirmed at a press conference in Copenhagen that the Danish armed forces would be allocated an additional DKK50bn in 2025 and 2026, on top of the near DKK200bn already allocated by the government and the parties behind the defence agreement up to 2033.
She said Denmark was in the most dangerous situation for many years, facing an “aggressive Russia that is arming itself and may be preparing to attack others”, and that defence procurement now had to happen at speed, because it was behind where it should be.
“We have to ignore many of the procedures that were probably created with the best intentions, but which belong to another time,” Frederiksen said, according to national broadcaster DR.
Kent Damsgaard, chief executive officer of Insurance & Pension Denmark (IPD), said the new proposal clearly showed the government was ready to invest on a completely different scale than seen before.
IPD said that it was up to individual pension companies, in conjunction with their customers and scheme members, to decide whether and how they wanted to invest in defence.
However, several Danish pension firms already had investments in defence companies around the world and collaborated with the armed forces on construction, for example, the group said in a statement yesterday. It added that several had also been positive about further investment both in army properties, public-private partnership (PPP) projects and defence technology and equipment.
“The pension companies, of course, have the clear starting point that their investments must ensure the best possible return for pension savers,” Damsgaard said.
“But several pension companies see good opportunities for investments in strengthening Danish and European defence, and the government’s proposal today is a strong starting point for us to find some frameworks and opportunities for pension companies that wish to contribute with private investments in the area of defence,” the CEO said.
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