The unwelcome grip of Basque terrorism

''No one can say what he thinks here,'' said Antonio Lopez, the chief engineer of a medium-size factory cooperative. As he began to talk, his wife, Maria, silently gestured that neighbors might be listening through the apartment walls. She got up and silently closed the windows so drifts of conversation would not be overheard outside in the muggy summer evening.

The scene did not take place in some South American dictatorship but in post-Franco democratic Spain, in the heartland of the northern Basque country. The village, nestled in a narrow valley, is almost equidistant from the Basque coastal capitals of Bilbao and San Sebastian, and the inland capital of Vitoria. Access is through misty winding roads lined with lush vegetation up and down small green storybook mountains. It is a one- to two-hour drive from any of the capitals, and less than 20 minutes away from the nearest beach.

''No one dares speak up publicly against ETA (the Basque nationalist terrorist organization) here because this is a small community and everybody knows everyone,'' said Mr. Lopez, who asked that an assumed name be used to avoid public identification and guerrilla reprisals.

He explained that all the local candidates in last May's elections belonged to the radical Herri Batasuna (HB, or the People's Unity Party), the political party openly linked to ETA (Basque Homeland and Freedom). There were no candidates even from the more moderate Basque Nationalist Party (PNV), which won a slight majority over HB in the neighboring small city where the factory cooperative, which employs most of the village, is located.

''Socialists are called fascist pigs here,'' Mr. Lopez said, ''and would literally risk their lives if they ran in these small towns, which the Socialist Party has evidently abandoned as a lost cause.''

''On an individual level after a friendship has been established, some Basques here will tell you they're fed up with ETA and the killings,'' the factory engineer stated, ''but just (two weeks ago) after a killing that was called a 'mistake' by ETA, the village priest passed around a beret in the town fiestas asking for donations to help ETA prisoners. Everyone chipped in, even one of my fellow colleagues in the factory who only an hour earlier had privately said the guerrillas were a band of thugs.''

Mrs. Lopez added that when someone proposes a celebration toast after a civil guard is killed, no one dares to voice disapproval.

Far from ''occupying'' the neighboring city of 10,000, the Spanish civil guards are virtually prisoners in their own garrison, never daring to venture out. No villagers speak to them. Stores and markets refuse to sell to their wives, and their children are ostracized and taunted.

''If you break these unwritten rules, you could be gunned down as a collaborator,'' Mr. Lopez said. ''ETA will hear about it.'' In turn, the civil guard doesn't bother to investigate normal criminal cases, such as robberies.

Mr. Lopez's wife, Maria, who is a native Basque from Bilbao, said such a reign of fear is visible only in the rural heartland and that the big cities are different. Government officials became concerned about a step-up of terrorism after it became apparent that HB was losing significantly in major Basque cities , although it gained in small towns in the heartland.

There have been 22 killings caused by Basque terrorism this year, only slightly more than the 19 last year in the same period. Two occurred last week: One was a Bilbao traffic officer, Francisco Garcia, and the other Antxon Tolosa, an alleged ETA member who accidentally blew himself up while handling a plastic explosive in the San Sebastian Port.

While Socialist government officials attended the funeral of the municipal policeman, HB and friends of the deceased Basque youth called for a strike of mourning in the old port section of his native San Sebastian, where he was a member of the local fiestas committee.

Labeling Tolosa a hero ''who died for his ideas,'' sympathizers and family friends issued a communique: ''The death of Antxon Tolosa is just one more in the struggle for national and social liberation of our people and is due to the lack of democratic ways to obtain goals widely felt by the working Basque people.''

HB added that the local fiestas will be turned into an homage instead of being suspended.

HB shares the same ideas about ''democratic ways'' as the founding father of Spanish fascism, Jose Antonio Primo de Rivera, who said in the 1930s that ''the best destination of the ballot box is to be broken.''

On July 11, in Irun, the border town with France, fanatic sympathizers of HB and ETA tried to end the election of a mayor by city councilmen by throwing the glass ballot box out the balcony, stomping on it, and then smashing it up. An angry mob of sympathizers showered eggs and tomatoes and chanted ''out with the dogs,'' ''out with the Spaniards,'' and ''the Socialists and police are the same garbage,'' among other things. When the Socialist candidate, Alberto Buen, was finally elected after a two-hour delay, the crowd cried: ''ETA, kill him!''

The Socialist Party had the largest majority (10 out of 25 seats) in last May's elections in Irun. It had contested the first election of a mayor by councilmen, because the voting had been done by a hand-showing instead of a secret ballot. A territorial court declared the first voting invalid.

In the second round, PNV, which had won on the first voting, abstained, while HB stormed out after throwing out the ballot box.

The incident has become symbolic of the increasing reign of terror and intimidation that HB has been encouraging in the Basque country, which is literally plastered with graffiti glorifying ETA gunmen. The affair has also increased tension between the ruling Socialist Party and the PNV.

The Socialists accuse the PNV of indirect complicity with the terrorist organization as a subtle extortion to gain advantages in never-ending economic negotiations over the transfer of regional powers. The regional governments have demanded federal subsidies but balk at accepting federal civil servants. The central government has said that the regional governments can pay for their own civil servants by regional and local taxes.

A long-delayed summit meeting between Spain's prime minister, Felipe Gonzalez , and regional Basque Premier Carlos Garaicoetxea of the PNV is set tentatively for July 21 or 22.

In an atmosphere of tension, the general secretary of the Basque Socialist Party (PSOE), Txiki Benegas, denounced the Irun incident as ''these barbarities that are happening to aid antidemocratic attitudes of the nationalists, who reject participation in a democratic election of the mayor of Irun.'' He condemned ''the role of thugs that HB is playing, doing the dirty work for the PNV.'' He added that he had no qualms about ''classifying actions such as these as fascist.''

Mario Onaindia, general secretary of a leftist group, Euzkadiko Ezkerra, and a former ETA member who was condemned to death under the Franco dictatorship and later pardoned to life imprisonment, pointed out the significance of the way HB assumed ''in such a passionate manner the defense of the interests of the PNV'' in Irun.

''This is one of those moments,'' he said, ''in which one is ashamed to be from this (Basque) country, where people say they fight for democracy, but break the ballot box when the results don't satisfy them.''

Spanish Socialists recognize the need for dialogue and hope that tensions will ease as more and more central powers are transferred to the region. Among other decentralizations, there are Basque highway traffic police, a regional television in the Basque language, Euskera, and schools in which only Euskera is spoken.

Once considered a language of unknown origin doomed to extinction, Euskera is now making a comeback. Although an ethnic Basque, Maria Lopez doesn't speak the language and is trying to learn the difficult grammar. Mr. Lopez, who claims to be the only person who doesn't speak Basque in the factory, enrolled his five-year-old daughter in a kindergarten where only Euskera is spoken.

''I'm glad she's learning it,'' he said, but worries that later on she will not be taught to read and write in Spanish. ''It's good to recover a language that is part of her heritage,'' he agreed, ''but after all, Spanish is spoken by over 250 million people throughout the world.''

The Basque television channel is now giving a weather report for Euskadi, the Basque word for their country. The map included the three Basque provinces of Alava, Vizcaya, and Guipuzcoa, the disputed province of Navarra, and three provinces in France, labeled ''northern Euskadi.'' The forecast predicted cloudy days ahead with scattered storms.