Danish doubts over Greenland vote

Despite the vote Denmark still holds the purse-strings

Danish politicians say Greenland is still years away from true autonomy, despite its vote for greater self-rule.

In a referendum on Tuesday, 75.5% of voters in Greenland backed a plan to increase their autonomy from Denmark, the former colonial power.

Denmark subsidises Greenland's 57,000 population to the tune of 3.2bn kroner (£395m) annually - two-thirds of the Arctic island's budget revenue.

Greenland's foreign policy and security will remain in Danish hands.

"Whether the Greenlanders can take over more political institutions themselves depends heavily on the natural resources. It could well be 30-40 years," said Per Oerum Joergensen, an MP in Denmark's governing Conservative Party. He helped negotiate the new Greenland autonomy deal.

Greenland's tiny population, combined with its economic dependence on Denmark, weakens the case for independence, even if Greenland strikes oil, a senior Danish Arctic affairs official told the BBC.

"The population is less than you could fit into the Superbowl," Mikaela Engell of the Danish foreign ministry said.

Danish funding

The self-rule plan is expected to be approved by the Danish parliament early next year and should go into effect on 21 June 2009.

Greenland's sparse population is scattered along icy shores

Under the new arrangement, Greenlanders - most of whom are native Inuit - will have control of their energy resources and will be treated as a separate people under international law. Kalaallisut will become the official language, instead of Danish.

But Denmark's 3.2bn-kroner annual grant to Greenland will be fixed.

If Greenland strikes oil then it will keep up to 75m kroner of revenue from the oil sales, but above that half will go to Greenland and half will be taken out of the Danish block grant. If the revenue reduces the grant to zero, then the whole subsidy deal will be renegotiated, Ms Engell said.

Danish MP Soeren Espersen, a member of the Danish People's Party, was sceptical about the new autonomy deal, saying Greenlanders had been "brainwashed with unprecedented propaganda".

"I believe huge problems are waiting in the future," he said.

Greenland gained self-rule in 1979, after previously being a colony and then a province of Denmark.

Greenland has been shaken by several scandals over abuse of public money and property in recent years. Danish police are currently investigating how 11 Greenland MPs and top officials managed to buy attractive properties at a third of the market price.

The scandals have led some Danes to call for stronger controls over Greenland's management of the Danish subsidies.

Untapped energy

Meanwhile, global warming is fuelling a new Arctic race for resources, as geologists get ice-free access to the vast area, raising the potential for a future energy bonanza.

But earlier this year, the US Geological Survey (USGS) more than halved its estimate of the potential oil and gas riches off the coast of Greenland.

In 2000, the USGS estimate was 40bn barrels of oil. In 2008, that was cut to 10-20bn barrels. Experts agree that it could well be 15-20 years before the oil is found - and even longer before the huge investments required pay dividends.

The European Commission says it is now time for EU countries to coordinate their Arctic policies, not least because it wants development of the region's huge resources to be sustainable and environmentally responsible.

Denmark, Sweden and Finland all control parts of the Arctic region. Greenland is associated with the EU, but is not an EU member under its conditions of autonomy.

Ms Engell said Denmark welcomed more EU involvement in the Arctic, having "tried to direct the EU's interest" towards the region.

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