Uh, what?
Euphoria is a physics engine, so GTA IV does use ragdoll physics. I don't understand what you even mean when you say that though.
Euphoria actually needs a physics engine to run, so it doesn't qualify as one by itself.
It combines ragdoll physics and animations to create "intelligent physics," as they call it. For example, if a character were staggering, Euphoria would make him balance while still keeping ragdoll-like physics in play.