The financial framework In view of the new security political situation, the Parties agree to increase the annual Danish defence budget by DKK 800 million from 2018 with an increased trend to DKK 4.8 billion by 2023 (table 1). The Agreement is financed from the overall fiscal margin. Table 1. Substantial increase for Defence DKK billion, 2018 prices Substantial increase 2018 0.8 2019 0.8 2020 1.7 2021 1.9 2022 2.8 2023 4.8 The substantial increase will bring the Danish Defence annual budget to a level that is 20 percent higher than today. At the same time, significant equipment investments over the agreement period demonstrate that Denmark aims to live up to NATO's guideline of investing 20 percent of the defence budget on new equipment. The overall financial framework for this Agreement is shown in Appendix 1. Due to the size and complexity of the initiatives the phasing-in will be associated with a degree of uncertainty. The actual phase-in might therefore deviate from the estimates in the appendix. Despite the uncertainties, all initiatives will, however, be kept within the Agreement’s general financial framework for the period 2018-2023. With reference to the Political Agreement of 9 June 2016, the Parties note that the acquisition of new combat aircraft is budgeted for in the Finance Act for the financial year 2018, and that changes in the cost of the acquisition between the individual years within the agreed financial framework of the Agreement, including between the Defence Agreement period 2018 -2023 and subsequent period until 2027 will be reflected in the annual appropriations for the Ministry of Defence. Strengthened Armed Forces Together with NATO, the Danish Armed Forces must have sufficient potency, weight and robustness to deter and prevent other countries from attacking our allies - and ultimately ourselves. First and last, our Defence is to protect Denmark. The Danish Armed Forces will therefore to an even greater extend work towards providing security and safety to the Danish population, including through increased support for Danish police. Evidently, the Danish Defence plays a crucial role in protecting our security, also in case of a crisis where a majority of Danish Troops is deployed abroad and there is a requirement for NATO reinforcements to use Denmark as a staging area. Alongside, the Armed Forces will develop the ability and capacity to participate in international operations. Establishment of a deployable brigade Based on Army's current operational capabilities, work will be undertaken to build a deployable brigade which can contribute to deter a more equal opponent and take part in collective defence under a NATO framework. The brigade will strengthen the Armed Forces' overall fighting power and mobility and will enhance the ability to operate in a NATO context. When not fully deployed, the brigade’s composite units can also be deployed individually thereby also enhancing the overall ability to participate more in international missions. The brigade comprises of new and strengthened capabilities: - More battle tanks for operations. Ground-based air defence. Anti-armour weapon systems for the combat battalions. Additional artillery. An additional reconnaissance squadron.

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