Danish Defence Procurement
This year Denmark’s politicians have reached a consensus on raising defence spending to 2% of GDP. Yet with many areas of competing importance requiring coverage, questions remain regarding Denmark’s main funding priorities.
Denmark needs to fully implement all of its NATO Capability Targets, in full and on time, with a special emphasis and urgency on all three of the prioritized capabilities. Until it does so, other Allies may potentially have to pick up part of Denmark’s fair share of the Alliance burden.”
The above quotation is taken from the NATO Defence Planning Capability Review 2019-2020, Denmark. I will return to this document later as it sets the scene for Danish Defence Procurement together with changes in Danish Foreign Policy, the 2% of GDP target for defence spending, a new national defence agreement, defence plans for the Arctic area, Russia’s unprovoked attack on Ukraine 24 February 2022, and not least that politicians are ‘promising people the moon’.
To understand defence procurement planning in Denmark, several factors need to be taken into consideration. The first of these is that the next Danish Defence Agreement, which will serve as the baseline for future defence procurement in Denmark, is scheduled to come into force from 1 January 2024. When contacting the Danish Acquisition Logistics Organization (DALO), the organisation stated that no information regarding defence procurement could be released before this agreement was in place. This means we will need to peer into our crystal ball and use the decisions taken by a majority of Danish politicians after Russia’s invasion as portents for the establishment of a national defence strategy aimed at countering the Russian threat.
Before this, it is necessary to say a few words on the NATO Defence planning review 2019-2020 covering Denmark. Allied Defence Ministers have agreed that Denmark should give priority to the development of a heavy infantry brigade. In addition to this a joint intelligence, surveillance, and reconnaissance (JISR) capability and an anti-submarine warfare capability should be established. The lack of progress in those areas led to the conclusion that “the Danish and NATO defence planning are misaligned”. There were hard words in October 2020, and the only remark from the Ministry of Defence was, “It is politics and nothing else”. Now, nearly two years later the situation has changed significantly, and Denmark has got a new Defence Minister.
In January 2022 Denmark launched a new strategy paper, which stated that today, NATO is more than a defence alliance; it is also a community of values against increasing autocratic pressure. Therefore, Denmark must strengthen NATO, both politically and militarily up to 2030, working to maintain the alliance and trans-Atlantic cooperation. The paper underlined that “It is a prerequisite for solving the difficult security policy challenges that we are facing. Especially when it comes to deterring totalitarian regimes from attacking democratic states and allies”. If anybody was in doubt before, Denmark is now fully aligned with NATO.
Further proof of commitment was shown on 6 March 2022, when the Danish politicians agreed that the current security situation resulting from Russia’s aggression demands a historic response, and agreed to gradually increase the country’s defence spending to 2% of GDP by the end of 2033. The agreement is labelled ‘The National Compromise on Danish Security Policy’, and means there will be a significant strengthening of Denmark’s defence and security, as well as Denmark now fully complies with the Objectives of the 2014 Wales Summit. From a procurement perspective, the agreement adds DKK 18 billion to the defence budget from 2024, which will steadily increase to approximately DKK 53 billion in 2033.
As part of the national compromise, Denmark held a referendum on 1 June 2022, where Danish voters were given the option of retracting Denmark’s opt-out from the European Union’s Defence structures. A majority of voters decided to vote for retracting the opt-out, meaning Denmark can now join the European Defence Agency (EDA) and thereby can influence the Permanent Structured Cooperation (PESCO), which is part of the EU’s security and defence policy (CSDP). This will be a new asset when deciding what types of equipment Denmark shall buy in the future, and provides options for joint procurement with other EU countries. This decision by the Danish voters might also have a positive impact on Danish defence industry, as they can now participate in EDA projects on equal terms and will no longer be excluded from projects, as has happened in the past.
An area where a procurement process already is being executed is the Arctic, following an agreement signed in February 2022. The systems being procured include long endurance surveillance drones as part of Denmark’s commitment to NATO’s Capability Target for airborne signal collection, and an air surveillance radar on the Faroe Islands. The location of new radar was agreed in June 2022, it is due to be installed at the old Sornfelli NATO site, to provide surveillance over the GIUK (Greenland, Iceland and United Kingdom) gap, as it did during the Cold War.
Anthony H. Cordesman, the Emeritus Chair in Strategy at the Center for Strategic and International Studies (CSIS), wrote in May 2022 that War in Ukraine is “a strategic surprise that has shown that US strategy must be truly global, be prepared for sudden and unexpected crises in unforeseen areas and be focussed as much on peacetime political and economic interests as on military relations with strategic partners and other states throughout the world”. In this context, Norway and the United States have signed a so-called Supplementary Defence Cooperation Agreement in summer 2022. According to the agreement, the United States will have unconditional right to access and use of four ‘agreed areas’. In Northern Norway, the two areas in question are Ramsund Naval Base and Evenes Air Base. So-called ‘agreed areas’ are basically limited places to be used jointly by the United States, Norway, and other allies for military purposes. In these areas, the United States can conduct training and exercise, deploy forces and store equipment, supplies, and other gear.
Following Norway’s lead, Denmark is working on establishing a similar agreement with the United States and might therefore be ready to give the United States access to its air and naval bases. This will influence future defence procurement and put pressure on Host Nation Support. As a preparatory measure, Denmark’s Ministry of Defence and Esbjerg Harbour signed a coordination agreement on 22 August 2022, the purpose of which is to ensure that Denmark will be able to receive NATO forces at a larger scale and faster than it could before.
In the wake of this agreement Denmark and Norway signed a Memorandum of Understanding regarding ‘Cooperation in the field of armaments’, under which Denmark and Norway agreed to work more closely together on research, development, production, procurement, and life-cycle support for defence-related equipment. This will strengthen the ‘know-how’ of both countries and provide a framework for identifying cooperation opportunities in the field of materiel acquisition.
The overall setting for a new Danish Defence Agreement from 2024 and onwards is roughly in place, the only part missing is a risk assessment from the Danish Defence Intelligence Service covering the planning period from 2024-2033. Their latest risk assessment is from December 2021, and it would make no sense to use it for further threat analysis given the unpredictable nature of the situation in Ukraine.
However, the Danish Defence Minister has a wish list for a new defence agreement to cover the following areas:
Security in the Baltics and the North.
Enforce the sovereignty of the entire Danish society, including the Arctic.
Robust Home Guard and Emergency Management Agency.
International stabilization and crisis management efforts in the frame of the EU, NATO and the UN.
Cyber and hybrid warfare.
Personnel, materiel, structures, and digitization.
Investments in Danish positions of strength within the maritime area, cyber, green transition, and drones.
However, the big question is whether there will be enough money, to cover this as well as unforeseen circumstances. Aside from this wish list, Denmark also set to buy two VIP aircraft for use primarily by the Danish government, though whether they will serve in a dual role is unknown at present.
To live up to NATO requirements, there is also an ongoing process of procuring an air defence system for Denmark’s heavy infantry brigade. From an operational perspective it would make sense to invest in the MIM-104 PATRIOT system. Both Sweden, Germany and the Netherlands have this system in their inventories, and the missile belt from the Cold War period could more or less be re-established again giving the armed forces a mobile NATO integrated air defence system. Some sources have mentioning the possibility of buying six Patriot Systems together with the Norwegian Advanced Surface-to-Air Missile System (NASAMS) to provide layered air defence.
In future procurements it might be necessary to focus on assets supporting a quicker Kill Chain and Joint All-Domain Operations (JADO). JADO comprises air, land, maritime, space, and cyberspace domains, as well as the electromagnetic spectrum (EMS). JADO involves extensive coordination and cooperation between all resources used in an operation and will be a new way of conducting operations.
The latest in this context might be the 18 August 2022 launch of a plan to renewing the Danish Navy running until 2052. The effort is estimated to require DKK 40 billion, and a Maritime Partnership has been established to explore the opportunities and competences in the Danish industry in relation to this ambitious programme. A forerunner for this surfaced earlier this year when Terma together with other companies announced that they would propose building the Danish Navy’s new patrol ships. Terma has a proven record of delivering radars and C2 systems to the Danish Navy and will be an important player in the programme.
However, some challenges remain for Danish Defence Procurement – all service branches lack sufficient personnel and equipment, and many contract soldiers are leaving service earlier than anticipated, making it hard to align with NATO plans and to rotate troops deployed on operation. To add to this, stocks of equipment are nearly empty due to having to supply Ukraine’s forces, and sources in the Danish Armed Forces are postulating that it will take years to return to normal stock levels. There are also signs of progress – the first of Denmark’s 27 F-35A fighter aircraft on order will be delivered from 2023, and a further 10 may be in the pipeline, while the phase out of the F-16 has been postponed to 2027, lessening a potential capability gap while the F-35A is still being introduced. Denmark is also a participant in NATO’s Modular GBAD effort, which may lead to a solution for Denmark’s air defence requirements.
Nonetheless, DALO is faced with a difficult task to align Denmark’s procurement with NATO requirements and the tasks given to the armed forces by the politicians, but as we say in Denmark: “Where there’s a will, there’s a way”.
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