The glitter which once made Europe a giltedged attraction for America's foreign investors hase become severely tarnished - and not just because of the old continent's faltering economy.

Progressive laws in areas such labor protection and corporate disclosure in the nine-nation European Economic Community are making profitable survival difficult, according to many U.S. based multinational corporations operating in the Common Market.

The changes, says Carl Nisser, a senior executive in Goodyear's European operations, are contributing to a "mental pollution dangerous to private enterprise."

For many firms in the EEC, "labor has become fixed cost - you can take people on, but you can't lay them off," says Nisser, referring to increasingly restrictive labor laws in the Common Market. These include an EEC rule on mass dismissals, which comes into force at year-end, imposing lengthy consultation procedures on an employer needing to cut back staff.

This EEC rule comments and American executive, "has harmonised the individual laws of European nations upwards, giving more security to workers if they are laid off - but it costs the firm a lot of money."

But for American companies this sort of labor-oriented environment is difficult to accomodate. "There is no flevibility in the European labor market - non mobility," says the Goodyear executive.

This factor, feel other American critics here, is a paradox in a Common Market which seeks to promote increased movement within its borders of goods, capital and labor.

With the European employe provided such strong social protection, he has a vested interest in staying put, says one critics of the present business climate here. But economic atrophy does not stop there, it creeps into management employment policy.

"How can you take logical staffing decisions when faced with such financialy anerous laws?" he asks.

On the other hand, "the advanced employmentlows found in the EEC have contributed to a greater measure of social peace than found in the U.S.A. - many less days are lost through strikes than in America," says business sources here.

The web of European disclosure requirements is also tightening in responce to pressure being spearheaded by the EEC for greater public accountability. While perhaps not as acute as the demands made by the U.S. Freedom of Informaton Act EEC rules pushing for greater information disclosure could pose problems for American companies, believes Nisser.

However, he also stresses that improved EEC laws are a major plus in providing more information for the general public and also on the activities of European rivals.

American business fears focus in particular on a new EEC proposal, whose legislative enactment begins its final phase with meetings to be held in Brussels in October.

This latest EEC move likely to force non-European companies with subsidiaries in several Common Market countries to provide detailed consolidation of their accounts - a costly business, says an American executive here.

That would not be so bad if it served a definite purpose, agree company officials here. But "European public authorities and trade unions are asking for information which we don't eve need ourselves to run our own business," claims one.

Another gripe is the allegedly excessive power of the Commont Market's trade unions in inflecting EEC laws affecting firms to labor's advantage. "The most powerful lobby at the EEC is the trade unions," says one company executive, adding that "in Europe, unions are ideologically opposed to capitalism."