Understanding the Unity of the Realm: What You Need to Know

The intertwined histories of curious Vikings, missionary expeditions, European conflicts, and the quest for power have shaped the rich union of Greenland, the Faroe Islands, and Denmark, which exists today as a cohesive community.

Embedded within the concept of Unity of the Realm is a sense of shared identity, one that binds us together as a collective entity.

This Unity is fundamentally rooted in mutual dependence, a relationship reinforced by shared histories and cultural exchanges between Greenland and the Faroe Islands. At its core, this interdependence can be distilled into two primary elements: economy and responsibility.

Since 1980, financial assistance from Denmark to Greenland has been encapsulated in a single term: the block grant.

Since 2009, following Greenland’s Self-Government Act, the block grant has remained unchanged at 3.4 billion Danish kroner, adjusted only for Danish inflation.

As of 2023, this amount reached 4.1 billion kroner. This grant plays a crucial role in supporting the standard of living and welfare needs of Greenland, which its current economy could not sustain otherwise.

Significantly, this grant accounts for approximately 50 percent of the self-government’s revenues today, a notable reduction from nearly 80 percent back in the late ’70s.

However, the block grant represents just one facet of Denmark’s financial support for Greenland, as the Danish state also funds the operation of roughly 30 sectors. This includes significant expenditures related to the judiciary, police, and penal systems, with overall operational costs totaling about 1.5 billion kroner annually.

In total, Denmark contributes 5.6 billion kroner each year to Greenland.

While this figure may appear substantial, it must be contextualized against Denmark’s overall public spending, which amounts to a staggering 1,200 trillion kroner.

Suddenly, the 5.6 billion kroner—or less than 0.5 percent of the total expenditure—doesn’t seem so overwhelming, especially considering it supports a population of 57,000 and covers 98 percent of the Kingdom’s total area.

Moreover, the financial gains from Greenlandic fish exports and other uncalculated expenses, such as Denmark’s role in the development of Nuuk’s new airport, estimated at 500-600 million kroner, remain largely overlooked.

The financial relationship between the Faroe Islands and Denmark also encompasses an annual block grant.

In contrast to Greenland, this amount is not inflation-adjusted, and the Faroese government is actively working to reduce their reliance on Danish support.

From 2015 to 2022, the block grant was set at DKK 641.8 million per year, but plans are underway to cut it by 25 million kroner annually, reducing it to 541 million in 2026.

Furthermore, Denmark incurs operational costs of 200 million kroner annually for specific sectors in the Faroe Islands, a stark contrast to the 1.5 billion kroner required for Greenland. This disparity can be attributed to geographical and climatic challenges, including the vast distances between towns, limited infrastructure, and harsh Arctic conditions.

Indeed, the block grant accounts for only about 10 percent of the Faroese self-government’s total revenues.

As the population of the Faroe Islands approaches 54,000—similar to Greenland—the economy is growing robust enough to pave the way for a gradual phasing out of the block grant.

Economic support is merely one side of the coin; the other is responsibility.

Here, we encounter another critical aspect of the Unity of the Realm: the Field of Responsibility.

Since gaining home rule in 1948 (the Faroe Islands) and 1979 (Greenland), Denmark has transferred various fields of responsibility, including legislation, administration, taxation, commercial fishing regulations, primary education, and healthcare.

As Greenland’s government—Naalakkersuisut—and the Faroese government take on these responsibilities, a process known as assumption occurs. Greenland and the Faroe Islands can, in theory, assume all sectors of governance and shift responsibilities away from Denmark, with a few notable exceptions.

Certain areas, including the constitution, citizenship policies, the Supreme Court, and foreign, security, and defense policies remain firmly within Denmark’s realm and are outlined in the Home Rule Acts of 1948 and 1979.

However, it’s important to note that when these responsibilities are assumed, they are not financially compensated by Denmark. Greenland and the Faroe Islands must independently finance their new responsibilities without any increase in the block grant; the aim is for them to eventually become self-sustaining.

Yet, this transition has proven more challenging than anticipated.

“Greenland must develop self-government in the future and take on economic responsibility for new areas,” remarked then-Prime Minister Anders Fogh Rasmussen during the opening of the Folketinget in 2008.

Despite this ambition, in the 15 years since, Greenland has only assumed responsibility for mineral resources, offshore work environments, and time zone determination. The only decision made since 2010 pertains to time regulations within Greenland, while Denmark continues to oversee approximately 30 critical fields, including law enforcement and corrections.

For the Faroese, the situation is somewhat akin. Although they have been more proactive in assuming responsibilities, they still face challenges in taking on the major, heavier fields.

The underlying reason for the hesitancy in both Greenland and the Faroe Islands is clear: a lack of financial resources hampers their ability to assume greater authority.