A major Danish pension fund has announced it will divest its holdings of U.S. Treasury securities, making it the first European financial institution to publicly exit American sovereign debt in response to President Donald Trump's threats against Denmark over Greenland.
AkademikerPension, which manages retirement funds for Danish academics and professionals, confirmed the decision following Trump's announcement of punitive tariffs targeting Copenhagen for refusing to surrender control of the autonomous Arctic territory. The move, first reported by Reuters, signals what analysts fear could be the beginning of a broader European retreat from U.S. debt markets.
"This is about risk management in an environment where the United States is threatening a NATO ally," a senior analyst at Deutsche Bank told reporters on condition of anonymity. The German financial institution issued a research note warning that "Europe owns Greenland—and a lot of U.S. Treasuries," suggesting the continent possesses significant economic leverage should the crisis escalate.
European institutions collectively hold approximately $2.3 trillion in U.S. Treasury securities, according to the most recent data from the U.S. Treasury Department. While AkademikerPension's holdings represent a small fraction of that total, the symbolic significance of the divestment has rattled financial markets.
The development comes as China and India have already been reducing their Treasury holdings in favor of gold reserves, part of what investor Ray Dalio has termed an emerging era of "capital wars." European divestment would represent a far more serious threat to U.S. borrowing costs, given the depth of transatlantic financial integration.
"If other European pension funds follow AkademikerPension's lead, we could see material upward pressure on Treasury yields," said Holger Schmieding, chief economist at Berenberg Bank. "That would make it more expensive for Washington to finance its $35 trillion national debt."
The timing is particularly awkward for the Trump administration, which requires continued foreign appetite for U.S. debt to fund both tax cuts and increased military spending. Any significant rise in borrowing costs could force difficult choices between fiscal priorities.
European Union Commission President Ursula von der Leyen stopped short of endorsing financial retaliation during remarks at the World Economic Forum in Davos, calling Trump's tariff threats "an error." However, she announced accelerated plans for an "EU Investment Union" designed to reduce European dependence on U.S. capital markets—a long-term strategic shift that would fundamentally alter transatlantic economic relations.
Belgian Foreign Minister Maxime Prévot was more direct, stating that the European Union may activate its "anti-coercion instrument"—a trade and financial retaliation mechanism designed to counter economic blackmail. The bloc has scheduled an extraordinary summit to coordinate response options.
The AkademikerPension decision also reflects a broader reassessment of American political risk among European institutional investors. "We spent the past eight years treating U.S. political volatility as temporary," one Frankfurt-based fund manager said on condition of anonymity. "The Greenland crisis suggests it may be structural."
To understand today's headlines, we must look at yesterday's decisions. The architecture of postwar economic integration assumed that Washington and its European allies shared fundamental commitments to sovereignty and territorial integrity. What happens when that assumption no longer holds is uncharted territory—for diplomacy, for security, and increasingly, for finance.
