Analysts at Deutsche Bank believe that the conflict between Europe and Washington over Greenland could have more serious consequences for the markets than trade disputes. According to the head of the bank's currency research, Georg Saravelos, the U.S. critically depends on foreign capital to finance external deficits, which makes them vulnerable in times of weakened political cohesion with allies. Europe owns about $8 trillion in American stocks and bonds, being the largest creditor to the U.S., and there are already signs of a reduction in dollar investments, including from Danish funds.
The escalation is related to threats from Donald Trump to raise tariffs if the USA does not get the opportunity to acquire Greenland. In Europe, these statements have provoked a sharp reaction: EU leaders declared the inadmissibility of pressure and the risk of escalating transatlantic relations. Deutsche Bank warns that if the European position consolidates, the pressure may shift from trade to capital markets, which would become the most devastating scenario for global markets.