Kathmandu. U.S. President Donald Trump wants to get Greenland. He is ready to take Europe on board for this.
The European Union (EU) is also reluctant to back down on this issue. The EU has stopped working on a trade deal with the United States. The agreement was signed last year and is currently in the process of approval and implementation. Greenland is currently under Danish control. The company declined to comment on the matter. However, Trump wants to take control of it.
If the issue escalates, it could jeopardize $10 trillion in U.S. investment, equivalent to one-third of U.S. GDP. Financial risk has never been greater in Europe and the United States.
EU investors hold $10 trillion in U.S. wealth. European investors hold $6 trillion in U.S. equities. That represents 58 percent of the total U.S. holdings of EU investors. Similarly, European investors hold $ 2 trillion, or 19 percent, in the Treasury.
Holding of Denmark
If the UK, Norway and Switzerland were included, Europe’s share of the US Treasury would reach 40 percent. According to U.S. government data, EU investors hold $2 trillion in U.S. corporate and other bonds. Agency bonds hold $225 billion. If European countries withdraw their holdings from the U.S. debt market, the U.S. could face difficulties.
Meanwhile, Denmark’s share of US Treasury holdings has fallen to a record low. It has come down to just $9 billion. That’s the lowest in 14 years. Last year, Denmark reduced its US Treasury holdings by $4 billion, or 30 percent.
Since 2016, Denmark has halved its holdings. Denmark’s holdings in U.S. Treasuries represent only 1% of the total European share. Recently, many countries have reduced their stakes in the U.S. debt market.
U.S. Debt
Meanwhile, U.S. debt is rising. 26 percent of the federal government debt is set to mature in the next 12 months. This means that $10 trillion in debt will have to be refinanced at higher interest rates in the coming years. This comes as the US Treasury has started issuing short-term bonds to reduce interest costs in the near future. –Agency
