PARIS -- The European computer industry, touted in recent years as a dynamic symbol of the Old World's economic renaissance, is rapidly succumbing to the pressures of a looming economic slowdown and the aggressive designs of American and Japanese computer giants.

A burgeoning list of prominent companies reporting huge losses and layoffs in recent months has rocked business and government leaders in Europe. They fear that some of the continent's flagship electronics firms may not be able to cope with powerful foreign competitors when the 12-nation European Community abolishes the last barriers to a single prosperous market of 340 million consumers in 1992.

The desperate plight of many European computer firms also is affecting strategies in what analysts call perhaps the next major battleground between the United States and Japan.

World leader International Business Machines Corp. already has established itself as the most dominant presence in the European computer market with $9.1 billion in 1989 sales and the weakness displayed by native continental firms may offer new opportunities to expand sales.

"IBM should get stronger because it is used to working in a large market and can exploit the {European} Community better than any other firm," said Richard Bradshaw, the National Science Foundation's senior analyst for European affairs.

But Japan has positioned itself shrewdly for a major assault on the European market by buying up struggling computer firms in Britain.

Fujitsu Ltd. has acquired an 80 percent stake in International Computers Ltd. and Mitsubishi Corp. has taken over the personal computer firm Apricot Computers PLC.

Those moves should give Japan a key foothold in European research and development programs, setting the stage for a challenge to IBM, Digital Equipment Corp. and other American computer firms for a larger slice of the European market, which totaled $27.8 billion in sales in 1989 and remains one of the world's most lucrative even if it is expected to shrink a bit as the continental economy slows down.

With the notable exception of the thriving German alliance of Siemens AG and Nixdorf Computer Corp., top European computer makers have been forced to undertake radical restructuring drives in recent months.

Philips NV of the Netherlands, saying it would lose $1 billion this year, is seeking to reduce costs by reducing its work force by 16 percent, eliminating 45,000 jobs, closing several plants and pulling out of the advanced memory chip market. Groupe Bull SA, the major French computer maker, reported a loss of $331 million for the first six months of 1990 and said it would slash 3,000 jobs. The Italian firm Olivetti Corp. also declared it would abolish thousands of jobs in a restructuring drive.

The threat of being overwhelmed by American and Japanese computer makers may soon spur European governments to find ways to preserve the competitive position of European companies. "I think it will be some time before we see a truly level playing field in Europe," Bradshaw said. "The community will work with national governments to create breakwaters so that leading European firms do not go under."

The sudden erosion of European electronics firms came after years of intensive efforts to boost transnational research efforts in preparation for the single European market. In the last decade, after Europe showed signs of falling irrevocably behind the United States and Japan in high technology, two major programs were launched to encourage greater cooperation in research and development among European Community firms.

Esprit, or the European Strategic Program for Research in Information Technology, was intended to boost collaboration in chips, software and computers through research funded by governments and participating firms. Jessi, for Joint European Submicron Silicon, was supposed to salvage the continent's lagging semiconductor industry, including memory chips.

While these programs succeeded in getting European companies to work more closely together on research, they failed to enhance their competitive position against American and Japanese rivals.

"It was simply a matter of too little, too late," said Philip de Marcillac, a Paris-based consultant for the market research firm Dataquest Inc. "Then, when markets began changing faster than European firms could manage to keep up, they ended up with misallocated resources and huge losses."

European computer executives contend that the steep decline of recent months occurred because the market suddenly flattened after five years of growing an annual average of 16 percent. In addition, a price war broke out at all levels of machines and services as foreign firms, especially American ones, began to compete more fiercely for the dwindling number of customers.

'Negative End of the Cycle' "We are now in a negative end of the cycle and Europeans are losing more ground to the Americans and Japanese," said Georges Grunberg, senior vice president for long range planning and European affairs at Groupe Bull. "But American firms are now more aggressive because of a weak market and the low value of the dollar. That situation is bound to change eventually."

Grunberg and other European computer executives said the industry will undergo further dramatic changes in the next few years as more standardized systems are introduced in Europe. He predicted that such change will benefit European firms by forcing them to turn their focus away from separate national markets. "We are still a long way from a truly single European market," Grunberg said. "Common telecommunications lines have not been set up and data system networks are still not identical. It will take more than a couple of years to achieve uniform systems."

Once continental standards are put in place, European firms may find salvation through mergers or agreements to share production facilities. In the past, said Dataquest's de Marcillac, "successful mergers were difficult to accomplish in the computer industry because of distinct workplace cultures and differences in the machines. But the shift toward standardized elements should make them easier to work out."

The smooth corporate alliance between Siemens and Nixdorf, which merged earlier this year, was aided by the fact that both are German firms concentrating largely on the same national market. Similarly, some consultants surmised that Groupe Bull might soon come under pressure from the French government, which financially supports Bull, to merge with SGS-Thomson and create a giant French flagship firm.

If anything, analysts believe that the economic climate surrounding the computer industry is bound to become gloomier. While growth is still expected to surpass market expansion in the United States and Japan, total European hardware sales are likely to slump to an annual growth average of 8 percent through 1994, according to projections by the International Data market research firm.

In this climate, the European computer industry is expected to go through a serious shakeout fairly soon, analysts said, with many firms forced to seek partners or risk being submerged by the intense competition. Others may seek refuge by looking for "niche" markets, as specialized firms dealing with a unique clientele.

In the view of some consultants, the choice facing several European firms is whether to link up with a Japanese or an American partner. Leading American firms seem intent on consolidating their vast holdings in the European market for now. According to Dataquest, IBM had more than $9 billion in European sales last year, almost four times the European sales of runner-up Digital. Other U.S. firms like Unisys Corp. and Wang Laboratories Inc. are too immersed in overcoming their own business difficulties to contemplate expansion.

Japanese Are Shopping But the Japanese firms seem bent on shopping for more companies to snap up in Europe. Besides Fujitsu's purchase of ICL and Mitsubishi's buyout of Apricot, Hitachi Sales Corp. is looking around for a European partner and may close a deal soon with Olivetti, analysts said.

The clear strategy of Japanese companies, said one admiring European executive, is to circumvent any "Fortress Europe" policies that could arise in a coming recession by acquiring local companies that can give them automatic access to the European market as well as key research programs like Esprit and Jessi.

That approach is generating a backlash among some European firms and governments that want to avoid a situation in which research and development programs funded largely by European taxpayers end up aiding Japanese companies. But analysts said the European Community will find it hard to make legal arguments stand up in court to prevent European companies bought up by Japanese parents from maintaining access to European research and development programs.

"The big prize in the 1990s is still Europe, because the use per capita of computers and software is still low compared to the United States and Japan," observed Bradshaw of the National Science Foundation.

"There is a lot of worry in Europe for the moment over how Japan can be forestalled from taking advantage of the tremendous potential there."