US Politics

Donald Trump has long been interested in Greenland becoming part of the United States. Yesterday, he told reporters he would not rule out using military force to acquire the Danish territory, saying “we need” it for the “economic security” of the United States. As he spoke, his son Donald Jr was in Greenland, on what is described as a private visit.

Last week, Greenland’s prime minister Múte Egede called for independence from Denmark and for the “shackles of the colonial era” to be broken. Last year, on December 23, he explicitly rejected Trump’s interest: “Greenland is ours. We are not for sale and will never be for sale.”

The Danish prime minister similarly dismissed the notion of Trump buying Greenland as absurd when he first raised it in 2019. Yet, Trump’s fascination with the Arctic island persists, reflecting broader geopolitical interests in the region.

Donald Trump Jr in Nuuk, Greenland, this week, as his father calls its acquisition by the US essential.
Emil Stach/Denmark Out/AAP

As the ice melts, new shipping routes and untapped resources, particularly rare earth minerals, have elevated Greenland’s strategic importance. It is the site of one of the world’s largest known rare earth metal deposits. And the Greenland Institute of Natural Resources reports “huge potential for oil exploitation in the waters” offshore.

But while Trump’s rhetoric is outlandish, Greenland’s history tells a deeper story of colonial entanglements, autonomy struggles, and international manoeuvring.

On the map, Greenland is nearest to Canada, though also very near Nordic Europe. Canada’s Ellesmere Island lies just 26 km to the north and Iceland is about 320 km to the southeast. While geographically part of North America, Greenland has maintained political and cultural ties with Europe, particularly Norway and Denmark, for over a millennium.

Denmark’s king sends a message

The Danish Royal Coat of Arms, revised in 2024.
Danish Royal Household

On December 20 2024, Denmark’s king, Frederik X, proclaimed a significant, but not unexpected, update to the royal coat of arms. Gone were the three crowns symbolising the historic Kalmar Union between Denmark, Norway and Sweden, which lasted from 1397 to 1523. In their place, the king opted for symbols more reflective of Denmark’s current realm: a prominent polar bear for Greenland and a ram for the Faroe Islands.

Denmark’s royal household announced: “The King wishes to create a contemporary royal coat of arms that both reflects the Realm and takes into account history as well as the heraldic tradition.”

The change, therefore, is essentially a modernisation, giving equal status to all parts of the kingdom. Political commentators around the world interpreted it as a message of solidarity with Greenland and the Faroe Islands at a time of growing tensions, particularly in light of Trump’s aggressive interest and Greenland’s calls for independence.

A brief colonial history of Greenland

Greenland has been inhabited for over 4,500 years by peoples moving there in a series of migrations from regions as diverse as Siberia, Alaska and Arctic Canada. The most recent Inuit migration occurred in the 13th century.

In the 10th century, Erik the Red, a Norwegian-born exile from Iceland, settled on the island. He named it Greenland and led expeditions that established several prosperous Norse settlements. Christianity was introduced in the 11th century by Erik’s son, Leif Eriksson. The first bishop’s seat was established in 1126.

Greenland was named by Erik the Red, a Norwegian-born exile from Iceland who settled there in the 10th century.
Dana File/AAP

From the 13th century onwards, Norse settlers engaged with the Inuit cultures. However, by the 14th century, climate cooling led to the decline of Norse communities, which were abandoned by the 15th century. Approximately a century later, expeditions from England and Norway arrived in Greenland. By the 17th and 18th centuries, European whalers frequently interacted with the Inuit, leading to extensive trade and Lutheran mission of Norwegian clergyman Hans Egede.

The US recognised Danish sovereignty in 1916

Greenland has been under Danish control for centuries, but full sovereignty over the island was not always guaranteed. In fact, a key development came from an unlikely source: the US. On August 4 1916, the US signed a declaration recognising Denmark’s sovereignty over the entirety of Greenland. This agreement was annexed to the sale of the Danish West Indies (now the US Virgin Islands) to the US. This represented a shift in America’s interpretation of its own Monroe Doctrine.

The Monroe Doctrine, articulated in 1823, warned European powers against further colonisation or intervention in the Americas. Yet, in 1916, the US effectively supported Denmark’s colonial ambitions by legally recognising its claim to Greenland. At the time, Denmark’s control was limited to settlements along Greenland’s west coast. From the 1880s onwards, Danish outposts expanded into the north and east, culminating in the formal declaration of sovereignty over the entire island in 1921.

This US recognition was critical: it legitimised Denmark’s claim internationally, barring objections from Norway, which sought to expand its Arctic fishing territories. Norway’s ambitions were thwarted, solidifying Greenland’s status as a Danish possession.

Colonial legacy and calls for independence

Denmark’s relationship with Greenland has evolved from outright colonisation to the current status of Greenland as an autonomous territory. Since gaining home rule in 1979 and self-government in 2009, Greenland has taken steps toward greater independence. Yet, it remains tied to Denmark in crucial ways, particularly through defence and foreign policy.

Greenland’s relationship with Denmark has evolved from outright colonisation, and continues to evolve.
Mads Claus Rasmussen/Denmark Out/AAP

Despite autonomy, Greenland’s colonial legacy casts a long shadow. Controversies such as the forced contraceptive scandal of the 1960s and 1970s, where Greenlandic women were subjected to coerced sterilisation, have fuelled resentment toward Denmark.

This painful history resurfaced last week, with prime minister Egede accusing Denmark of genocide over the scandal.

Why does Trump want Greenland?

Greenland’s importance on the global stage is multifaceted. Its location in the Arctic makes it a key focus for military strategy, climate research and resource extraction.

For Denmark, retaining Greenland is not only a matter of historical continuity, but also geopolitical necessity. Meanwhile, for the US, the Arctic represents a frontier of strategic competition, particularly with Russia and China.

For Denmark, retaining Greenland is a geopolitical necessity.
Ida Marie Odgaard/Denmark Out/AAP

In this context, Trump’s 2019 suggestion to “buy” Greenland seemed tone-deaf but not entirely without precedent. The US has long sought influence in Greenland, dating back to World War II, when it established military bases on the island. The 1916 recognition of Danish sovereignty may have been a legal formality, but it underscored the US’s pragmatic interest in Greenland’s strategic location.

Greenland’s future

King Frederik’s decision to emphasise Greenland and the Faroe Islands in Denmark’s coat of arms reflects the kingdom’s current priorities. The new design asserts they are integral parts of Denmark, not negotiable assets to be sold or relinquished.

As Greenland edges closer to independence, its journey reflects the reality of its history, geography and politics. For centuries, Denmark’s control over Greenland was contested and tenuous. Today, the question is not whether Denmark can retain sovereignty, but whether Greenland will choose to remain part of the Danish realm.

Trump’s remarks about “mak[ing] Greenland great again” may have been met with ridicule, but they inadvertently highlight the broader significance of this icy island.

Greenland’s colonial history, evolving autonomy and geopolitical importance ensure it will remain at the centre of global attention. More

Throughout 2024, many home owners and prospective first-time buyers would have kept a close eye on the Bank of England’s base interest rate. Eventually, the first cut arrived in August (from 5.25% to 5%), followed by another drop to 4.75% in November.

Those changes were in line with market expectations. But they were not enough for many households feeling the economic squeeze.

For example, the average mortgage lending rate for a typical first-time buyer (based on a two-year fixed rate with a 10% deposit) was around 5.4% in both January and November 2024.

And the full impact of higher mortgage rates, which began rising in late 2021, has not yet been felt. The Bank of England expects that around 50% of mortgage holders (approximately 4.4 million households) will have to switch to higher rates between now and December 2027.

Of these, an estimated 2.7 million borrowers will experience rates above 3% for the very first time. Around 420,000 households will face monthly payment increases of more than £500.

There is some good news in the latest projections which suggest that by the end of this year, the Bank’s base rate will drop to around 3.75%. An estimated 2.4 million borrowers will then see a drop in their monthly mortgage payments.

Banks and building societies are also expected to increase mortgage lending by 11% in 2025, as affordability constraints ease with falling rates and rising real wages. Some major lenders have already started the new year by announcing marginal reductions. Others are likely to follow suit.

But that may be as good as it gets. The recent rise in the UK’s annual inflation rate to around 2.6% is troubling, for example. Inflation is expected to remain above the Bank of England’s 2% target throughout 2025, which could slow the pace of rate cuts.

Another downside, particularly for first-time buyers, is the continued increase in UK house prices. Over 2024, they increased by 4.7%, with the average price now £270,000. So gains from reduced mortgage rates could be swiftly cancelled by the increasing pressure on housing affordability.

There are also signs that households are being cautious with their home purchase decisions as mortgage demand dropped unexpectedly after the government’s budget of November 2024.

The effects of that budget are still coming into play, but early signs are not promising, as the economy is expected to show zero growth for the second half of 2024. For 2025, the predictions for UK economic growth is 2% at best.

Tariffs and Trump

One of the controversial policies introduced in the budget was the rise in employers’ national insurance contributions – which could have a couple of knock-on effects for mortgage holders.

Don’t bank on a slide in interest rates.
Jane Rix/Shutterstock

First, the increase in cost to businesses could be passed on to households as price increases. This would put further pressure on inflation, and could affect interest rate decisions. Second, it may slow down wage growth, making houses even harder to afford.

Another risk in 2025 is that the UK’s sluggish economic growth could lead to reduced tax revenues. If that happens, the government may face having to raise taxes again or resort to additional borrowing. Government borrowing costs have risen sharply since the budget, and further borrowing could exacerbate this trend.

This is significant for mortgage borrowers, as government borrowing costs serve as a key indicator of overall interest rate levels in the economy. As a result, mortgage rates may follow a similar trend.

There are also economic uncertainties linked to Donald Trump’s return to the White House. There are predictions that UK economic growth could even be halved if the returning president Trump follows through on his proposed trade tariffs, significantly reducing UK exports to the US.

Other global risks include the potential for retaliatory trade wars which could exacerbate global inflation and drive up interest rates further.

One small piece of good news for UK home buyers has been the prime minister’s commitment to build more affordable homes in the next four years. Such a move will certainly help, and could slow down house price increases.

However, these plans are likely to stall as it is much more costly for builders to build new houses on the targeted “grey-belt” areas. And the UK still faces skills shortages in things like bricklaying and carpentry.

Overall then, for anyone with a mortgage, and anyone hoping to get hold of one, 2025 looks full of uncertainty. And while the political and economic winds do not look particularly favourable, those all important interest rates will dominate many people’s biggest life decisions for another year. More

Billionaires played an unprecedented role in the 2024 US elections, with 150 of the world’s wealthiest families contributing nearly US$2 billion (£1.57 billion) trying to influence the outcome. This included donations from the likes of Elon Musk (US$133 million for the Republicans) and Michael Bloomberg (US$45 million for the Democrats).

It was a big spend – but from their perspective, a very affordable one. The US$2 billion sum represents just 0.07% of their collective wealth.

Many of those donors were very open about their political spending. But it has also been claimed that some extremely wealthy people often engage in “stealth politics” in the US – seeking to influence policies that may conflict with the majority’s preferences, without attracting public attention.

Tactics might include covert lobbying and gaining private access to public officials, which largely go unnoticed. And even though it is hard to establish exactly how much political influence the elites really have, there is evidence which suggests that US government policy is disproportionately shaped by the preferences of the wealthy.

Ordinary citizens, meanwhile, exert minimal influence – yet effectively pay higher tax rates than the richest Americans.

So it is perhaps easy to see why some question the fundamental fairness of the country’s economic and political systems.

One option for change could be new legislation that focuses on areas like campaign funding and media regulation. This might create a greater separation between money and politics, which could in turn lead to greater equality in political influence. This separation is far clearer elsewhere, and may be one of the reasons why in other countries, the preferences of poorer people seem to affect government policy.

But the apparent political power afforded to billionaires has led some to propose bolder changes. Philosopher Ingrid Robeyns, for example, has made the case for “limitarianism”, which argues for a cap on individual wealth to safeguard democracy and curb inequality (among other goals).

A related idea links limitarianism to billionaires’ political influence, suggesting that the super-rich should face a stark choice. Either they should accept a 100% tax on wealth above a certain threshold, or forfeit certain political rights, such as party donations or standing for office.

These proposals face their own criticisms, including concerns that limiting wealth could negatively affect economic growth and innovation. But they still form part of an ongoing discussion about how to balance individual wealth accumulation with the needs of democratic systems and the principle of economic fairness.

Public opinion

But what do voters think?

One study suggests that most Americans favour higher taxes on the ultra-rich while hinting at widespread public misconceptions about the lives of many billionaires. When they learn more about how luxurious those lives really are, support for taxing the ultra-rich increases significantly.

So perhaps greater public awareness of the realities of extreme wealth would shift attitudes further in favour of policies geared to more distribution of the country’s wealth.

There also seems to be broad support for policies like President Biden’s billionaire minimum income tax, which seeks to impose a minimum 25% tax rate on billionaires’ income and their assets. California’s “extreme wealth tax”, a proposal for a new tax for those worth over US$50 million, also appears popular.

Beyond tax policy, one of our recent working papers explores public attitudes toward limiting billionaires’ wealth. Our findings indicate that many Americans – regardless of political affiliation, and even in a hypothetical situation where inequality is significantly reduced – support wealth caps.

Our study also suggests that people who support wealth caps are concerned about the effects of wealth concentration on economic, political and environmental systems.

Washington and wealth.
Ceri Breeze/Shutterstock

That said, we do not expect such caps being part of the next US president’s plans. After all, Trump’s previous tax cuts were said to have overwhelmingly helped the richest.

But as the likes of Elon Musk become more openly involved in politics their influence is becoming more visible. And this increased visibility could attract more public scrutiny and even a backlash.

Then, ideas like wealth caps and higher top tax rates may gain traction as more Americans question the legitimacy of an economic system that allows a tiny elite to wield disproportionate power. And perhaps with their recent expensive interventions aimed at picking the next occupant of the White House, the ultra-wealthy may have inadvertently strengthened the case for sweeping reforms aimed at limiting their power and wealth. More