In order to come closer to NATO's demands, the Danish government has after intense deliberation and fine-tuning reached an agreement on a defence budget increase, putting the total defence expenditure until 2023 at DKK 26.5 billion ($4 billion), the newspaper Berlingske reported.
The hike dubbed "new money" comes on top of the DKK 57 billion ($8.7 billion) that Denmark pledged to spend on the purchase of F-35 fighter jets over the course of the next three decades.
Danish Defence minister Claus Hjort Frederiksen of the centre-right Venstre party admitted that the massive DKK 4.5 billion ($690 million) hike is a result of relentless pressure from Donald Trump, who has long been pushing for NATO members to open up their wallets and increase their defence expenditure instead of solely relying on the US.
"This objective has been long-known. But it's no secret that the pressure on NATO members reached turbo mode after Trump's arrival", Hjort Frederiksen told Berlingske.
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The plan has garnered the support of the opposition parties. Former Danish Foreign Minister Martin Lidegaard of the Social Left Party supported the hike, despite calling it a "strange signal".
"European countries are basically sending a strange signal that they are giving up to an American president who does not hesitate to question the entire alliance. That said, I acknowledge that Denmark is under pressure", Lidegaard said.
According to Lidegaard, the money should be used on cybersecurity and efforts in the Arctic.
However, despite the massive hike, Denmark still falls short of meeting NATO's target of 2 percent of the GDP. Even with the budget increase, its defence expenditure amounts to only 1.5 percent.
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Admittedly, meeting this demand became a key goal for the Danish government for fear that Copenhagen may be left in a vulnerable situation following Germany's announcement to bring its defence spending to 1.5 percent. Claus Hjort Frederiksen compared Denmark to Germany, Norway and the Netherlands in "having roughly the same social structure and solid economy".
"It's been important for us not to stick out in a negative way", Hjort Frederiksen explained.
Denmark's military spending has long revolved at around 1.2 percent of the GDP, having dropped since the late Cold War-era, when it was above 2 percent.