Regional Outlook : Europeans Are Lining Up for Applications to Join the EC : * Nearly every country on the Continent wants to either be a member or establish economic ties with the Community.

Sweden wants in: It hopes membership in the European Community will help cure its double-digit inflation. Austria wants in: As a member of the EC, it believes it could sell more of its products to the 12 EC nations. Even tiny Cyprus wants in: Membership in the EC, according to its predominantly Greek-Cypriot government, would give it an added measure of security from Turkey.

In fact, for a host of reasons, practically every non-EC European country from wealthy Scandinavia to fast-changing Eastern Europe is seeking to join or at least to establish some sort of special relationship with the community.

“More and more countries are thinking in terms that they shouldn’t miss the train,” says Frans Andriessen, vice president of the European Commission, the EC’s executive branch.

The end result, although it might be decades away, could be a Continent tied together both economically and politically--not only an economic colossus but also a major diplomatic force in the post-Cold War world.

“The community, now 340 million strong, sees itself as the cornerstone of the new architecture of Europe,” declares Jacques Delors, president of the European Commission. “It is therefore forging closer links with the rest of Europe, tailoring its approach to each individual situation.”

Yet Delors worries that the EC’s cumbersome decision-making procedures might become unmanageable with many more than the 12 current members. When Sweden applied to join on July 1, he asked: “Must we throw into the wastebasket of history an experience that works in favor of a new intergovernmental organization that might turn out to be a disaster?”

Delors says the EC will not even consider membership applications until Jan. 1, 1993, the target date for turning its 12 member nations into a single market with no national barriers to the movement of goods, services and people.

A further concern is the EC’s painstaking search for a formula allowing it to speak with a single voice on matters of foreign and defense policy. If the EC succeeds--and it is by no means certain that it will--such neutral countries as Switzerland and Sweden could find that full EC membership was not for them.

Delors says Sweden will have to choose between neutrality and the European Community, “unless we give up the idea of the EC having a common defense policy. I am not ready to give that up.”

The EC has only itself to blame for its magnetic popularity. Its astonishing economic success since it launched its single-market project in 1986 has made it the envy of Europe.

Economic growth in the EC reached 10.4% during the three years from 1988 through 1990, substantially higher than the U.S. rate of 8.1%. (The 12 EC nations are Britain, France, Germany, Italy, Ireland, Denmark, the Netherlands, Belgium, Luxembourg, Spain, Portugal and Greece.)

Spain, whose economy has soared since it joined the EC in 1986, has become a role model for poorer non-EC countries.

Likewise, the Scandinavian countries outside the EC like most of what they have seen in Denmark, the only one on the inside. Denmark, by linking the value of its krone to that of the other EC currencies, has squeezed its inflation rate from double digits to barely more than 2%. Its chronic balance-of-payments deficit with the rest of the world has turned into a surplus for the first time since 1963.

“We expect that the beginning of the EC single market in 1993 will give economic growth another boost,” says Joergen Birger Christensen, chief economist of Den Danske Bank.

EC membership does not come cost-free. In Denmark, for example, the unemployment rate had been 2% before it hitched its star to the European Community in 1973. Now it is 10.3%.

Christensen argues that Danish unemployment is a product of that country’s inefficient labor markets and does not set a pattern that other Scandinavian countries must follow. “There is no horror story waiting for Sweden,” he says.

Maybe not for Sweden’s overall economy. But in Sweden, as in most of the other countries seeking a home in the European Community, an assortment of special interests is lining up on the other side.

Swedish feminists are one. Their argument goes like this: EC membership would force Sweden to adopt EC-style economic policies. That in turn would emasculate Sweden’s welfare-state benefits, which include publicly financed child care and 15 months of paid leave for new mothers. Without those benefits, many women would have to leave the work force.

“Women do not want to be sent back to their kitchens,” says Swedish trade union leader Kristina Persson.

Then there are Swedish devotees of chewing tobacco--an estimated 800,000 of them in a nation of more than 8 million. To their alarm, the European Community is considering banning chewing tobacco as a public health menace.

“Of course we are worried,” says Lars Kronquist, production manager for Gothia Tobacco in Goteborg. “There are 800,000 consumers in Sweden who want this product.”

They will have their say. Swedish Prime Minister Ingvar Carlsson has promised a nationwide referendum on EC membership.

In the other direction, there is strong public support within the EC for letting Sweden and other relatively rich nations join. According to the EC polling agency Eurobarometer, support among EC residents for Sweden is 89%, followed closely by that for Norway (88%), Austria (86%), Switzerland (85%) and Finland (85%).

Only Sweden and Austria have applied for membership so far, and they have grounds for hoping that they can join as early as 1995. “We would welcome them because these are European countries with similar history and culture,” says Belgian Economics Minister Willy Claes.

Norway and Finland are edging closer to submitting their formal applications. Only Switzerland, with its history of neutrality, still plans to go it alone--for now.

These five countries plus Iceland (and, as of September, tiny Liechtenstein) constitute the European Free Trade Assn., which is nearing the final stages of negotiating a “European Economic Area” with the EC. The goal is to allow the unimpeded movement of goods, services, money and people across the entire 19-nation area.

Negotiators have yet to resolve some thorny issues. Iceland and Norway are seeking full opportunity to sell their fish to the EC, for example, and EC nations Spain and Portugal are demanding greater fishing rights near Iceland and Norway.

Switzerland wants to impose its strict weight limit on trucks from the EC, and Austria wants EC vehicles to meet strict antipollution tests. None of the issues, however, seems likely to block the establishment of a European Economic Area as early as the beginning of 1992.

From another direction, three of the new democracies of Eastern Europe--Poland, Czechoslovakia and Hungary--are individually seeking a sort of associate membership in the EC. They would be excluded from the EC decision-making process but included, to an as yet undetermined extent, in some sort of a lowering of barriers to the exchange of goods and services.

To a surprising degree, EC public opinion favors eventual membership for these three countries--73% for Czechoslovakia and Hungary and 72% for Poland.

But French President Francois Mitterrand is not so sure. So different are the Eastern European countries, he says, that they would impede his dream of common EC foreign and defense policies. “For decades and decades,” he said in a recent radio interview, Eastern Europe should be content with economic arrangements with the EC that exclude them from a role in EC decision-making.

Even Turkey, which has applied for full EC membership, is supported by 55% of the EC public (although in Greece, sentiment runs 99% opposed). EC rules stipulate that decisions to admit new members must be unanimous, and Greece has no intention of letting its enemy into the club.

Also on the list of formal applicants are the Mediterranean island nations of Cyprus and Malta. Neither can look forward to membership soon.

The Cyprus government is looking over its shoulder at Turkey as it seeks entry into the EC. “We believe the best security is to be part of a bigger international entity,” says Nicos Agathocleous, Cyprus’ ambassador to the EC. “That means a loss of sovereignty for us, but we gain from being part of a big, secure entity.”

Malta’s ruling National Democratic Party has its own reason: to gain duty-free access to Western European markets for goods that it imports from third countries, particularly in Africa. The opposition Labor Party, however, wants to orient the island not toward Western Europe but toward nearby Libya.

Nor does the list of countries knocking on the EC’s door end there. Tiny Andorra, surrounded by EC members France and Spain, completed a customs union with the EC on July 1 by adopting a regime of import tariffs that square with the EC’s. That allows for the free flow of goods between Andorra and the EC.

EXPANDING THE EUROPEAN COMMUNITY EC COUNTRIES

Belgium:

Inflation Rate, 1990: 3.4%

Unemployment Rate, 1990: 8.8%

Britain:

Inflation Rate, 1990: 9.5

Unemployment Rate, 1990: 5.5

Denmark:

Inflation Rate, 1990: 2.7

Unemployment Rate, 1990: 9.6

France:

Inflation Rate, 1990: 3.4

Unemployment Rate, 1990: 9.0

Germany:

Inflation Rate, 1990: 2.7

Unemployment Rate, 1990: 5.1

Greece:

Inflation Rate, 1990: 20.4

Unemployment Rate, 1990: 7.7

Ireland:

Inflation Rate, 1990: 3.3

Unemployment Rate, 1990: 14.0

Italy:

Inflation Rate, 1990: 6.1

Unemployment Rate, 1990: 11.0

Luxembourg:

Inflation Rate, 1990: 3.7

Unemployment Rate, 1990: 1.3

Netherlands:

Inflation Rate, 1990: 2.5

Unemployment Rate, 1990: 6.5

Portugal:

Inflation Rate, 1990: 13.4

Unemployment Rate, 1990: 4.6

Spain:

Inflation Rate, 1990: 6.7

Unemployment Rate, 1990: 16.2

APPLICANTS FOR MEMBERSHIP

Austria:

Inflation Rate, 1990: 3.3%

Unemployment Rate, 1990: 3.3%

Cyprus:

Inflation Rate, 1990: 3.5 (1988)

Unemployment Rate, 1990: 2.4

Malta:

Inflation Rate, 1990: 0.9 (1988)

Unemployment Rate, 1990: 4.1

Sweden:

Inflation Rate, 1990: 10.5

Unemployment Rate, 1990: 1.5

Turkey:

Inflation Rate, 1990: 60.3

Unemployment Rate, 1990: 10.1

EFTA COUNTRIES*

Finland:

Inflation Rate, 1990: 6.1%

Unemployment Rate, 1990: 3.4%

Iceland:

Inflation Rate, 1990: 15.5

Unemployment Rate, 1990: 1.7

Norway:

Inflation Rate, 1990: 4.1

Unemployment Rate, 1990: 5.2

Switzerland:

Inflation Rate, 1990: 5.4

Unemployment Rate, 1990: 0.6

EASTERN EUROPEAN COUNTRIES**

Poland:

Inflation Rate ,1990: 60.0%

Unemployment Rate, 1990: 7.0 5 estimates

Czechoslovakia:

Inflation Rate ,1990: 14.0

Unemployment Rate, 1990: N/A

Hungary:

Inflation Rate ,1990: 29.0

Unemployment Rate, 1990: 4 estimates

* European Free Trade Assn. (EFTA) countries negotiating a “European Economic Space” with the EC, Austria and Sweden alsonegotiating with EC as part EFTA.

** Eastern European countries negotiating associate EC membership.

Sources: Organization for Economic Cooperation and Development, PlanEcon