The Danish Presidency from Central and South-East European perspective I. Becoming a security guarantor in wider Europe?

After two Presidencies of the Council of the EU headed by Central European countries – namely Hungary and Poland – Denmark will take over this role. Although several parts of presidency’s activities are pre-fixed, the presiding country’s priorities and characteristics have some influence on the agenda. Under the slogan ‘A strong Europe in a changing world’, the Danish Presidency will work for a secure Europe as well as a competitive and green Europe.

Continuity with the Polish Presidency will characterise the coming period on supporting Ukraine and the rearmament of Europe. The Danish Prime Minister, Mette Frederiksen made it clear in her opening speech that Russia poses a serious security threat to Europe and accordingly, every action should be taken to promote Ukraine and to restrain Vladimir Putin to sustain its war machine. According to the Ukraine Support Tracker of the Kiel Institute for the World Economy, Denmark has individually pledged appr. 8.6 billion euros in military allocations, surpassing bigger countries like France and Poland. The total allocations’ value reaches 2.577% of the country’s GDP. In the end of June 2025, Denmark also agreed with Ukraine on the integration of the two countries’ defence industries and allocated 67 million euro for supporting establishment of production by companies from the Ukrainian defence industry in the country. It is one of the European countries that broadened the scope of the already existing obligatory military service in 2025 as well. This engagement is likely to be reflected in the Presidency’s approach.

Copenhagen will focus on areas that are relevant from the point of view of ending the Russian aggression, namely sanctions against Russia, support for Ukraine politically, economically and militarily as well as strengthening defence capacity of the EU. Although Denmark refused to soften its position on restrictive EU level budgetary and debt policy even during the COVID pandemic – thus getting to the group of so-called Frugal Four –, the war in Ukraine made a significant shift in the Danish standpoint, especially regarding financial support for rearmament and strengthening European defence industry in the coming 5 years. In May 2025 the Council has adopted a regulation setting up the Security Action for Europe (SAFE), a new EU financial instrument that will support those member states that wish to invest in defence industrial production through common procurement, focusing on priority capabilities. The European Commission will raise up to EUR 150 billion on the capital markets, providing financial levers to EU Member States to ramp up the investments in key defence areas like air missile defence, drones, or strategic enablers.

Speeding up the process of strengthening the EU’s defence capacities seems to be inevitable as the U.S. is sending messages to the European leaders that the U.S. no longer wishes to be a security guarantor in Ukraine and Europe. As the negotiations about Ukraine (and the broader international context) in different formats are going on, the EU should get ready to demonstrate readiness for becoming a security guarantor with proper capabilities and political will. Proper projection of power can not only strengthen the bargaining position of Kyiv but contribute to wider stability and security of Europe. The Presidency could assist the President of the European Commission and the Vice-President/High Representative for Security and Foreign Policy in bringing closer Member States positions to each other and strengthening national level commitments.Until the end of November 2025 member states should prepare their initial national plans for SAFE based on which the Commission could make decisions. The Danish Presidency will assumably be a constructive partner in this process.

The coming period will also highlight which Central and Southeast European countries could be the main beneficiaries of this instrument. As of 8 July 2025 Bulgaria, Croatia, Czechia, Slovenia, Slovakia, Poland, Greece and Hungary from CSEE activated the national escape clauses under the Stability and Growth Pact which indicates high interest in defence industry investments in the region and even more countries wish to participate in SAFE. This instrument could not only contribute to strengthening security and defence capacities of the Eastern flank of the EU but economic growth as well. According to the Kiel Institute’s report: “A conservative estimate is that the Europe-wide GDP will grow by 0.9% to 1.5% if defense spending increases from 2% to 3.5% of GDP.”.However, the debate on the joint EU debt could continue in which according to Line Andersen, Economist of CEPOS Copenhagen should retake the “frugal” position in order to protect its own fiscal stability. András Deák, Senior Research Fellow of the John Lukacs Institute also reminds on that beyond increasing lack of fiscal discipline, this credit-motivated investment in the defence industry could undermine proper policy planning and dilute commitments of member states toward their common goals while the European Commission can broaden its leverage to policy fields that do not belong to it. However, worries about these concerns seem to be surpassed so far. In the light of these, it is to be seen whether member states will be able to strengthen their common defence policy goals and work in the same direction. When it comes to fiscal stability, the Central and Sout-East Europe seems to become the test zone where experience will either confirm or refute the above mentioned fiscal concerns.

Those countries which have already invested in defence industry might be in a better position and the relations with the U.S. administration will also have their impact. Romania, Poland and Czechia could increase financial bases of their defence industry and other CSEE countries could take also measures to decrease technological and modernisation gap with Western part of the EU. SAFE could encourage cooperation among EU member states and their companies but further steps will be necessary to overcome challenges stemming from the fragmentation of the European defence industry and its markets and to build the EU’s own capacities. Even von der Leyen’s messages remain unclear in the light of the “deal” made with Donald Trump in the end of July according to which the EU countries should increase trade and investment in the field of military cooperation as well.

Countering Russia’s war machine for the Danish Presidency is not limited to the defence policy. Copenhagen will encourage member states to engage even more in green transition (including revision of Energy Taxation Directive, strengthening Carbon Border Adjustment Mechanism (CBAM)) in the energy sector and decrease further the reliance on Russian energy resources. As it was decided in May this year, long-term gas contracts with Russia will be phased out in the coming years and shadow fleets transporting Russian oil will be addressed as well as Russia’s presence in the nuclear energy sector will be restricted. When it comes to possible impacts on Russia’s war machinery, these sanctions might not be able to produce substantive harms as oil and gas import from Russia in the EU has already decreased significantly thank to the REPowerEU Plan (e.g. gas import from 46% to 19%) since the war in Ukraine. On the other hand, the EU will still have to deal with the relatively higher energy prices and its impact on competitiveness.

Copenhagen’s ambitions are likely to be challenged by some CSEE countries like Hungary and Slovakia which still try to sustain their good relations with Moscow. Such political resistance might become louder if Washington and Moscow would show some signs of rapprochement which could raise hope that intensity of sanctions against Russia could decrease and there would be a window of opportunity to revive economic relations with Moscow. While there will be attempts not to close doors towards Russia too early, these countries will parallelly work on cooperation with the US administration as well. Both Slovakia and Hungary wants to build BWRX-300 small modular reactors (SMRs) designed by the U.S. company GE Vernova Hitachi with the involvement of Poland’s Synthos Green Energy (SGE). This would be in line with the European Commission’s and the Presidency’s effort to strengthen energy security of the European Union. This alternative balancing energy source could be preferred by the Danish Presidency as well. Despite former opposition to nuclear energy, discourse also changed in Denmark in that regard.

While share of renewables are likely to increase in the CSEE regions as well, the role of natural gas and LNG will probably further increase in the EU’s balancing energy mix and thus the Southern gas corridors’ role could get bigger attention, especially if increasing supply of natural gas and LNG could decrease price level. Since the war in Ukraine started, dominant directions of gas flows changed significantly. Previously the SEE region relied much more heavily on the gas transfers via Ukraine and CEE but recently thank to Trans-Adriatic Pipeline and Balkan Stream, the LNG terminals and the increasing level of connectivity among gas supply channels, quantity of gas reaching the EU via SEE could grow further. Such trend could continue because of the increasing LNG and oil import from the United States to the EU which was also part of the “great deal” between Trump and von der Leyen. Although the announced level of import increase seems to be unrealistic, South-East Europe can be one of the important entry point for the increased volume of LNG.

Denmark is in a lucky position in that sense that its foreign policy goals regarding Ukraine largely overlaps with the one of the European Commission and majority of member states and thus can well cooperate with the rest of the EU’s leadership. At the same time, a pragmatic rotating presidency could further strengthen cohesion among member states and push for stronger engagement in order to speed up progress, especially in the field of building defence capacities for the European Union.