Europe's Economic Groups to Meet

EUROPE is coming together at the seams. The divisions that have made it a continent of often antagonistic economic groupings are starting to fade as the East-West dialogue opens up.

A crucial move toward a more united Europe will likely be made tomorrow, when the European Community's 12 foreign ministers and those from the six European Free Trade Association (EFTA) countries are expected to agree in Brussels to formal negotiations on a wide range of issues. EFTA consists of Finland, Sweden, Norway, Iceland, Switzerland, and Austria.

Such a decision carries relations between the two groups far beyond industrial trade talks, to which they have until now been limited by political constraints.

``Of course you can't talk about European integration without discussing Eastern Europe,'' says Georg Reisch, EFTA's secretary-general. ``[The EFTA ministers] are preparing a paper on where we stand.''

The speed of reform in Eastern Europe has heightened the sense of urgency to build stronger EC-EFTA ties. Problems between the two groups suddenly appear small, compared with the big one of what to do about Eastern Europe, Mr. Reisch says. ``We must get our relationship with the EC settled, so we can jointly work with them on this matter.''

Ironically, a larger integrated Europe could soothe concerns about ``Fortress Europe''; EFTA nations would be in a stronger position to fight any EC protectionist moves.

``Free trade is our lifeline,'' says an EFTA country diplomat.

EFTA countries have an economic clout disproportionate to their size. EFTA is the EC's major trading partner, with the US and Japan far behind.

EFTA is in a special position to provide Eastern Europe with an economic, though not necessarily a political, opening to Western Europe: EFTA's per capita trade with Eastern Europe is three times that of the EC's.

The group of six nations also has a record of 20 years of special cooperation with Yugoslavia, including talks about setting up a $100 million industrial development fund.

Yugoslavia has let EFTA know it is interested in a real free-trade agreement, but, says Reisch, ``You can't have that with two different systems. But we will open a dialogue with them.''

These developments are closely watched by Warsaw Pact countries, especially Hungary and Poland, which reportedly have made overtures to EFTA.