A return to arms Danske Bank resumes defence investments
Asset managers with Danske Bank, Denmark’s largest financial institution, may now place investors’ money in nearly all European firms working in the defence industry, after it removed 30 firms from its blacklist earlier this month, leaving only producers of the most controversial weapons out of bounds.
The decision comes amidst growing European concerns about whether it can protect itself from a Russian attack, should America not live up to its commitment as a member of Nato. It also comes as European countries, looking to build up their defences after years of neglect, are now making it easy for their militaries to spend—and giving them plenty of money to do so. Denmark, for example, is expected to increase its defence spending from the current 2% of GDP to perhaps 5% in the coming years. Meanwhile the European Commission in March said it was making €800 billion available for defence spending.
For investors, such measures provide moral backing to the interest they had already begun showing the defence industry. After years of favouring funds that made a virtue of shunning arms, investors, according to Danske Bank, have more than doubled the amount of money going into defence-related firms over the past two years.
Despite its about-turn, Danske Bank is keeping its restrictions on controversial weapons banned by international conventions, including cluster bombs, anti-personnel mines and biological and chemical weapons. Similarly, it says it will continue to offer investment options for those those who prefer their capitalism with a streak of pacifism. All’s fair in investment and in war.
If someone out there was going to make artificial intelligence an inªtegral part of its economy, a good bet would have been Estonia. Already one of the most digitalised countries, it is now looking to systematise its approach to the technology with the aim of increasing the size of its economy by half by 2035 (amounting to an extra €20 billion). Unveiled yesterday by Kristen Michal, the prime minister, and a group of the country’s all-star entrepreneurs, the Eesti.ai initiative will start by identifying the areas where AI stands to make the biggest impact. (The leading candidates are education, healthcare and security.) Once the areas are finalised, public-private partnerships will then be set up to develop applications that can increase productivity.
For a country in Estonia’s situation, such increases are not just nice-to-have. Its population is shrinking, and, all things being equal, when residents do not have enough babies, the labour force contracts. The result must either be fewer services or higher taxes. Immigration is one way to avoid having to make a that choice, but this option is becoming increasingly less viable; population declines are not unique to Estonia, and that is putting skilled labour at a premium throughout Europe. Another is to find ways for the hands that remain to do more work, and here, Estonia is hoping that, AI, in the labour market at least, will make its residents more productive.
Denmark and Germany say they are ready to split the cost of any public funding needed to make sure that Bornholm Energy Island becomes a reality. Essentially a set of offshore windfarms that would double Denmark’s offshore wind capacity, the project, if completed, would send power to 4.5 million Danish and German consumers via its namesake island. More than that, say boosters, it provides a model for other mega energy projects that lawmakers are more keen on than investors.
Locally, the news has been well received. Even the healthiest of economies would find it hard to be unhappy about being the focal point of a multinational project whose final tab is expected to be over €4 billion. Bornholm, meanwhile, is still striken from the implosion of its fishing industry in the 1980s. But while a project of this sort will be good for its budding offshore industry, particularly if an associated industry estate comes to fruition, local lawmakers are still treading carefully: energy firms have yet to deem the project worth putting money into, while those living near the 111 hectare converter station will need be placated (read as: compensated). . Beyond that, there is irony of spoiling a chunk of pristine coastline of Denmark’s most popular tourism destination in the name of clean energy. If being a Danish island is a challenge these days, being a green one is doubly so.
Fourteen countries bordering the Baltic and North seas are pointing the finger at Russia as the source of navigational-signal jamming and ship-identification manipulation that are making their waters increasingly dangerous places to sail. The countries now urge everyone that has anything to do with shipping—flag states, shipping companies and operators, to name three—to be aware of the risks Russian antics pose and ensure their vessels are prepared, should they be forced to make due without electronic navigation systems.
Although the start of Russia’s jamming coincides with its annexation of Crimea, in 2014, the problem grew significantly worse after the start of its unprovoked war against Ukraine, in 2022. Mostly, this has been a problem for its neighbours who are in Nato (Latvia says it saw the number instances of jamming rise to 820 in 2024, compared with 26 in 2022) but, by framing jamming in terms of maritime safety, they are making it an international issue. Up to now, countering jamming has mostly involved making sure that mariners have the skills to sail without satnav—and, most recently, giving them alternative, if lower-tech, systems they can use to navigate by. Coastal states, however, say they will require that vessels adhere to the vast body of international maritime-safety regulations. Call it a pretext for preventative action.
On Thursday, the Baltic’s largest container port reported the best year in its history—for the third year running. Last year, Baltic Hub, a part of the Port of Gdańsk, handled 23% more containers than it did in 2024. The increase is directly tied to the completion in June of T3, the facility’s third deep-water quay, which raised its capacity by a third.
The expansion of Baltic Hub significantly increases its competitive advantage in the region, and puts pressure on other ports to keep pace, but it should not take its edge for granted. Many of its competitors in Poland were already on the decline, due largely to a falling volume of coal shipments, and are making investments of their own in the hopes of reversing their fortunes. The twin port of Świnoujście and Szczecin, for example, is investing 10 million złoty (€2.4 million) in upgrades, including construction of its own deep-water container port. Its capacity will only be half of Baltic Hub’s, but it touts road and railway access, as well as its existing ferry and LNG terminals, as its strong suits. A port cannot thrive on containers alone.
At 10:16 this morning, Bornholm lost power. The outage was immediately localised to the submarine power cable linking it with southern Sweden. Precisely 30 minutes later, Trefor El-net Øst, the TSO for the island, announced that the outage had been due to an overload caused by a technical problem; the cable was undamaged.
For the island’s 40,000 residents and its businesses, the three hours or so without power was a minor irritation. For those who are responsible for keeping the island running in the event of a situation of this sort, it was a golden opportunity: not knowing what the reason for the outage was, or how long it would last, emergency plans, including firing up the island’s backup power plant, were set into action.
The good news is that the initial reports seem to indicate that everything went mostly according to plan. More of a concern is the reason for the overload, and why it caused the entire island to black out. Call it an unknown known.
For years now, rail buffs and those keen on closer EU integration have had their eyes firmly, if nervously, fixed on Rail Baltica, a planned high-speed railway connecting the three Baltic states that is far behind schedule and way over budget. Somewhat overlooked amid that drama has been the steady progress of another, less prestigious railway project connecting Tallinn, Tartu, Rīga and Vilnius via existing railways.
Since last January, when service began on a limited basis—and requiring transfers in each of the three countries—it has transported some 16,000 passengers, well above expectations. That is due to get a bump this year: an extension of service that began on Monday means most of the line can now be travelled without a transfer. A limited number of departures and long travel times will make it less of an option for long-distance travellers, and, even for regional travel, coaches will still be a competitive option, but southern Estonia and northern Latvia in particular are hoping that more infrastructure ties will give rise to better economic ties, spurring growth. Tartu, Estonia’s second-largest city, has long felt that a direct connection to someplace other than Tallinn was overdue.
Detractors point out that the €2 million subsidy the line will require is much more than other lines get, and that standing up the service will require a further €400,000 initial investment. Public officials expect the subsidy to fall as passenger numbers grow, but the are concerns that there may not be enough passengers for it ever to become viable. For now, the trains will run, but they may not get much time.
The leaders of Sweden’s Socialdemokraterna are calling for the establishment of a permanent multinational Nato force on the island of Gotland. Their plan, put forward on Sunday during the opening day of Folk och Försvar, an annual security conference, proposes establishing a contingent that could supplement the island’s existing defensive capabilities. They also suggest making the island the home base of an 800‑person amphibious battalion capable of operating throughout the Baltic.
Gotland, given its strategic location in the Baltic, has been a focal point of Sweden’s post-post-Cold War rearmament. Even so, the island remains only lightly defended—the Gotland Regiment, re-established in 2018, comprises only 350 soldiers. Gotland’s home-guard unit reckons it could muster another 500 soldiers in the event of a Russian attack, and the thinking in Stockholm had been that the combined force would be enough to hold any unforeseen Russian invasion in check until reinforcements from elsewhere in Sweden and the rest of Nato could arrive.
But, with Moscow expected to be antagonistic for the foreseeable future, and Washington looking increasingly unwilling help out, that strategy is up for revision. In practice, the military is already preparing for both of these scenarios: in September, Sweden held its first bilateral drill with Poland on Gotland (pictured above).
Politically, Socialdemokraterna are in the opposition, but the proposal aligns with the government’s own position that it would welcome a Nato contingent if the alliance decided to send one. Their hope is that they would do so before the Russians decided to send their own.
(📸 Försvarsmakten)
For mariners in the Baltic Sea plagued by disrupted satellite-navigation systems, help is on its way in the form of a forgotten technology. Sjöfartsverket, the Swedish maritime authority, will equip a total of ten lighthouses on Sweden’s south-eastern coast, starting with Kapelludden (pictured above), with what is known as a radar beacon, a system that, in short, emits a Morse-code signal when it receives a radar signal. Navigators who receive the signal can then determine their ship’s location from the bearing and distance to the beacon.
Sweden, like other countries in the Baltic, points to Russia as the source of disruptions to satnav systems used not just by ships, but also aeroplanes, and research has shown the signal that causes the them is strongest near Kaliningrad. Regardless of who is to blame, it is a growing problem. Mariners say it is a regular occurrence, and perhaps tens of thousands of ships in one of the world’s busiest maritime areas have been affected. Fortunately, navigators can still find their way with other methods, including navigational charts on paper. They require more effort to use—and often additional training—but they are also harder to disrupt. Necessity is also the mother of re-invention.
(📸 Stefan Svanaeus)
Mention Bornholm to any Dane, and they will immediately think of summer. That is a problem for an island that is looking to promote itself as a place to visit year-round. So far, efforts to promote winter tourism—including a pledge by shopkeepers to stay open throughout the off-season—have sputtered. Zero in on December, though, and Christmas, at least, is beginning to look a lot like a success story. The success of Bornholm’s Christmas markets, though relatively new, can already be read in the statistics: since 2021, when Destination Bornholm, the municipally funded tourism bureau, began marketing them to people on the mainland, the number of overnight says for November and December have doubled.
Bornholm’s markets have neither the size nor the history of those held elsewhere, but, say attendees, that is precisely their draw. The focus, instead, is on quality; locally produced handicrafts are the main fare. Group Bornholm, a tourism agency, this year organised its first tour for Germans to visit the island’s Christmas markets. Most of the thirty people along on the sold-out trip had rave reviews for the smaller scale and intimacy of the island’s markets, and many said they would be interested in seeing the island at another time of year. This will not be the last Christmas for Bornholm’s markets.
(📸 Toxophilus)
Denmark’s culture ministry has named the town of Svaneke (pop 1,000) on the island of Bornholm, as one the country’s best-preserved examples of its built heritage. In all, 16 places ranging from entire villages to the centre of Copenhagen, all of them dating from the Middle Ages to the 19th century, were selected as examples of how historic areas can retain their distinct characteristics, while also functioning as modern inhabited areas. The designations are meant to be an inspiration for other places in Denmark from the same time period. For the 16 sites that made the list, the local councils that are responsible for them will be required to place preservation on par with development when making decisions about them.
Some towns might see that as a threat, but, for Svaneke, it is a relief and a recognition of the work local groups have put into keeping the town looking much the same as it did in the 19th century—to the extent that the owners of homes whose chimneys had been removed by past owners were at one point told to add one, even if it served no function. Their fervour and attention to detail has already been twice honoured: first in 1975, by the Council of Europe, and again in 2014 by Danes in a popular vote to find the country’s prettiest market town.
When the European award was given, Palle Lauring, a popular historian, said of the town’s efforts, “the people of Svaneke were satisfied that their town was as it was.” Apparently, visitors have been too. Svaneke is the most visited town on Bornholm, and Bornholm is Denmark’s biggest tourism destination. That can make Svaneke a crowded place during the high season, but, those who come say it is a nice place to visit because people want to live there.
(📸 A Savin)