Minister For Finance
The following year he became Minister for Finance in the Fine Gael, Labour Party and Democratic Left "Rainbow Coalition" government. Quinn took a relatively conservative line as Finance Minister, being conscious of his position as the first Labour Minister for Finance in Irish political history. He quickly proved his competence, dispelling opposition jibes and stock market fears about a social democratic minister holding the sensitive finance portfolio. The Irish economy continued to perform, while inflation and the government finances were kept under firm control. Unemployment gradually fell and public debt levels improved.
During Quinn's tenure as Minister for Finance, the overall tax burden in Ireland (the ratio of tax revenue, including pay related social insurance levies, to gross national product) fell from 38.7% to 34.8%, of by 1.3 percentage points each year. He achieved this by limiting current government spending to grow by 6.8% in nominal terms or 4.8% in real terms, against a backdrop of improving economic fortunes, due to increasing investment in technology intensive sectors of the Irish economy.
Under Quinn, the General Government Balance went from a deficit of 2.1% in 1995 to a surplus of 1.1% in 1997. The General Government Debt went from 81% of GNP in 1995 to 63.6% in 1997. The year before Quinn became an economic Minister in 1993, Irish economic growth was 2.5% (1992). In 1993 GNP growth was 3%; in 1994, 6.5%; in 1995, 8%; in 1996, 7.8%; and finally in 1997, 10.3%. The unemployment rate fell from 1993 to 1997 as follows: 15.7% in 1993; 14.7% in 1994; 12.2% in 1995; 11.9% in 1996; and finally, 10.3% in 1997.
Quinn served as the President of the Ecofin Council of the European Union in 1996, and worked to accelerate the launch of the European Single Currency, whilst securing Ireland's qualification for the eurozone. Quinn, and his party leader and Tánaiste, Foreign Minister Dick Spring enjoyed a somewhat uneasy relationship during the Rainbow Coalition, as recounted in Quinn's 2005 memoir. At the 1997 general election the Labour Party returned to opposition, winning only 17 of its outgoing 33 seats. Many other ministers of the Labour Party were under significant pressure from the media (particularly the Irish Independent) concerning allegations of cronyism ("jobs for the boys") and abusing the privileges of office. In comparison, the opposition under Bertie Ahern placed heavy reliance on cutting tax rates as opposed to widening tax bands favoured by Quinn. Ahern also claimed credit for the country's improving economy was due to his earlier term in government.
Read more about this topic: Ruairi Quinn
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