European summit could be a cliff-hanger

European Community leaders meet in Athens this Sunday for what has been described as one of the most important turning points in the history of the 10 -member group.

The conference will be the culmination of six months of often difficult talks designed to save the EC from bankruptcy and to ''relaunch'' the Community.

Greek Prime Minister Andreas Papandreou went to Paris, Brussels, Bonn, and Rome last week in his current capacity as president of the Community and host of the coming summit to stock of the state of negotiations.

''The only optimistic thing is that all member states agree that the Athens summit will either be the beginning of a new Europe or the end of it,'' Papandreou told the press.

The EC's foreign and finance ministers met in Brussels Monday and Tuesday to draw up guidelines for reforming EC finances and agricultural policy. At least two solutions for each outstanding problem will be presented to the heads of government, according to Greek Undersecretary of Foreign Affairs Grigoris Varfis.

Wrenching decisions for the EC include:

* Rebalancing each nation's contribution to the Community - as well as the benefits each receives.

* Reforming the farm-subsidy program, known as the common agricultural policy (CAP), which has steadily grown to absorb more than two-thirds of EC resources.

Members will seek to keep the growth in agricultural spending below the increase in the overall budget. Britain and West Germany want firmer lids on farm benefits.

* Increasing the Community's budget income by raising the value-added tax now imposed in each country (although Greece has yet to put such a tax into effect).

* Adopting new policies to boost the Community's competitiveness in such areas as high-technology research and development.

Whether the summit is a success, the Community will not be the same afterward , in the view of observers.

Failure to reach a solution will require the Community to retrench. It has reached the legal limit of spending. Already the European Commission has frozen payments on some agricultural products, and the European Parliament has placed the Community's supplemental budget for this year on hold for lack of money.

If the summit is a success, the EC will be given new life. The financial and agricultural spending disputes that have hampered it for years will at last be eliminated. The long-discussed enlargement of the Community to include Spain and Portugal will finally be feasible. And the new policies will allow the Community to break out of the stagnation that has beset it recently.

Finally, Britain's temptation to withdraw from the EC may diminish. The British believe they have been receiving a raw deal from the Community, as they have contributed to the EC budget a share far out of proportion with their relative wealth.