HOW THE IRISH FAILED TO SAVE CIVILIZATION:

Irish maverick meets EU stonewall (Graham Bowley, March 5, 2005, International Herald Tribune)

[Charlie McCreevy, the European Union commissioner for the internal market,] was the liberalizing, tax-cutting finance minister who helped engineer Ireland's high-growth economic miracle in the 1990s.

Last November, he came to Brussels to bring Ireland's free-market ethos to the whole of Europe, aiming to galvanize Europe in the same way he had helped galvanize what became the Celtic Tiger.

His centerpiece was to be a new law called the services directive, which would have allowed companies - from architects to plumbers - in one EU country to set up shop in any of the 24 others. It could have transformed the European economy: Services account for nearly two-thirds of EU economic activity.

But McCreevy, a ruddy-faced fast-talker, came up against the realities of wider European politics, in particular the opposition in France and Germany to liberalization that could see low-cost companies from Europe's new members undercutting French and German workers and companies.

On Thursday, he had to stand up in the commission in Brussels and say he was exempting swathes of Europe's services sector from the proposed law, including public services and health care, and would provide a watertight guarantee against low-wage competition.

It was a step that obviously went against his free-marketeer's blood. But in an interview a few hours afterward, he denied that the reversal was a setback for economic change in Europe. Instead it was a necessary reaction to the political realities in Europe.

The reality of the EU is economic setback.

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U.S. siren song for Europe's drug makers (James Kanter and Carter Dougherty, March 5, 2005, International Herald Tribune)

The Dutch drug company Organon has scored notable successes in Europe, having developed successful fertility treatments, contraceptives and antidepressants from the rural city of Oss, where it was founded in 1923. But when it came time to start new research into vaccines and treatments for arthritis and rheumatism, the company sought brighter pastures - in the United States.

Having set up a parallel headquarters in Roseland, New Jersey, in 2003, the company is gearing for research and development in Cambridge, Massachusetts, a global center for life sciences. Its team of 35 researchers may have Dutch roots, but their sights are fixed across the Atlantic on the world's largest market for pharmaceuticals.

"As much as we hate to admit it, the United States has the advantage over Europe," said Monique Mols, a spokeswoman for Organon, a subsidiary of Dutch chemical giant Akzo Nobel. "And we wanted to be in a hot spot."

The pharmaceutical industry, once one of the jewels in Europe's industrial crown, has been outsourcing research and development to the United States for two decades. But industry figures show the pace has quickened in recent years. European drug makers are lured by abundant financing in the United States, a less-complicated regulatory environment and ready access to millions of consumers who generally pay higher prices for their medicines.

Posted by Orrin Judd at March 5, 2005 7:53 AM