Historical background

Greenland, the world's largest island, is about 81% ice-capped. Vikings reached the island in the 10th century from Iceland; Danish colonization began in the 18th century, and Greenland was made an integral part of Denmark in 1953. It joined the European Community (now the EU) with Denmark in 1973, but withdrew in 1985 over a dispute centered on stringent fishing quotas. Greenland was granted self-government in 1979 by the Danish parliament; the law went into effect the following year. Greenland voted in favor of increased self-rule in November 2008 and acquired complete responsibilty for internal affairs in June 2009. Denmark, however, continues to exercise control of Greenland's foreign affairs, security, and financial policy in consultation with Greenland's Home Rule Government.

Economic overview

The economy remains critically dependent on exports of shrimp and fish and on a substantial subsidy - about $700 million in 2008-09 - from the Danish Government, which supplies about 60% of government revenues. The public sector, including publicly-owned enterprises and the municipalities, plays the dominant role in the economy. Several interesting hydrocarbon and mineral exploration activities are ongoing and in 2007 a US firm signed an agreement with the Greenland Home Rule government to study the feasibility of building a multi-billion dollar aluminum smelter and hydropower plant. Denmark plans to reduce its subsidies to Greenland as revenues from oil exports come onstream.