The imminent expansion of the European Community to incorporate Spain and Portugal has provoked a fresh wave of soul-searching across the continent about the identity of the 12-nation bloc and whether the vision of a "United States of Europe" can survive much longer.

The euphoric celebrations last March that marked the end of eight years of arduous negotiations and opened the doors of the community to the young Iberian democracies have given way to doubts about the ability of the fragile institutions and diverse governments to overcome the national interests that have stymied progress toward greater unity.

Few Europeans challenge the necessity of cementing Spanish and Portuguese ties to Western Europe and the alliance of democracies. EC membership, which takes effect Jan. 1, may improve prospects that Spaniards will decide in a March referendum to remain part of the North Atlantic Treaty Organization.

The Iberian countries' special relations with the Arab world, Africa and Latin America could also enhance the community's diplomatic clout in these regions if it chooses to exercise its power as the world's largest commercial bloc, which includes more than 320 million people.

"The entry of Spain and Portugal will give the community a better equilibrium by strengthening the southern axis," said Lorenzo Natali, the EC commissioner who conducted the enlargement negotiations.

But such considerations have failed to assuage a spreading anxiety among governments and community officials that an enlarged community could paralyze a decision-making process that has grown increasingly sclerotic since Britain, Ireland and Denmark joined in 1973.

The prolonged absence of tangible progress toward political unity and the new complications posed by Spain and Portugal have lent credence to the fear that the community may wind up as little more than a loose trading association, with occasional joint proclamations on foreign policy that suit the least common denominator of 12 distinct nations.

Besides the troubles inherent in coping with the community's expansion, the economic gap between rich and poor nations will be magnified greatly. Spain's standard of living is barely half that of the average of the rest of the community's -- with Portugal's even lower -- and the yawning difference is likely to make concerted economic policies among the 12 even more difficult.

Both new members are expected to require substantial funding to cope with the economic shock of entering the community, adding to the other members' burden at a time when unemployment still averages more than 11 percent and other poor regions in Greece, Italy and Ireland are clamoring for extra subsidies.

The formidable task of assimilating Spain and Portugal during an era of economic stagnation and shrunken political ambitions on the continent has led many analysts to sound the death knell for the goal of a united Europe in the last half of the 20th century.

That dream took root in the rubble of World War II and became an active process under the guidance of visionaries such as Jean Monnet, Paul-Henri Spaak and Konrad Adenauer. The goal still seemed plausible when France, West Germany, Italy, Belgium, Luxembourg and the Netherlands signed the Treaty of Rome nearly three decades ago.

During the 1960s, the six founding members of the community enjoyed fast economic growth flowing from relatively unfettered trade policies. Their shared affluence and contiguous borders contributed to a merging of security interests, as well as a harmonious view of the outside world.

But the community's heyday ended with the leap in oil prices in the mid-1970s, a blow compounded by the political jolt of embracing three new members on the fringe of continental Europe. Progress toward European unity became subordinate to coping with recession and Britain's demands for rebates from the community budget.

Within the past two years, French President Francois Mitterrand and West German Chancellor Helmut Kohl tried to revive momentum toward European unity by urging a quantum leap toward integration for those members prepared to do so while other states would lag behind until they found it propitious to join.

But the "two-speed" Europe initiative quickly foundered, not least because of domestic opposition within France and West Germany. Since then, the community's leaders have been trying to reach a consensus for reforms by focusing on the approaching enlargement deadline.

"We found that Europe can only develop through small steps and not revolutionary acts," Horst Teltschik, Kohl's chief adviser on foreign and security affairs, said in an interview.

"The mood may be changing. I think Britain now sees the value of joint foreign policy positions, and even Greece appears to recognize that the way to overcome its economic troubles is to work in a more cooperative way with its European partners," Teltschik said.

Early this month, the community's heads of governments agreed to alter the unanimity rule by adopting majority voting to remove most trade barriers in order to expedite the formation of a true common market. The leaders vowed to eliminate by 1992 all obstacles to the free movement of people, products, money and services.

The erosion of the unanimity rule, which Charles de Gaulle insisted upon as the price for keeping France inside the community in a confrontation with other leaders two decades ago, is now seen as imperative if the 12 are to avoid a virtual breakdown in the decision-making structure.

But attempts to implement majority voting to accelerate economic integration often have faltered, and there is skepticism at the EC's executive Commission headquarters that government leaders ultimately will muster the courage to fulfill their promise.

"The current political leadership is perhaps the weakest aspect of the community," said the Commission's spokesman, Hugo Paemen. Other Eurocrats lamented the passing of power from West Germany's Helmut Schmidt and France's Valery Giscard d'Estaing, whose friendship and shared European vision encouraged common foreign policy positions and the linking of currencies.

Elections in the next two years in France, the Netherlands, West Germany and Britain are likely to instill greater caution among existing governments, inducing them to shy away from bold and painful steps toward a more effective and unified community that might antagonize powerful national lobbies.

Further hesitation in political leadership also worries many European industrialists, who believe that unless the 12 governments take certain risks with national interests to invigorate the community there is little hope of staying in competition with the United States and Japan.

"The real progress toward economic integration is taking place outside established government, among businesses who see the need to combine forces if they want to meet the challenge of the U.S. and Japan," Paemen said.

More than two dozen of Europe's top private businessmen petitioned the government leaders at the Luxembourg summit meeting to plunge ahead with bold measures designed to break down barriers within the community and unify the market as quickly as possible.

But the national governments, as many advocates of European unity concede, are not entirely responsible for the community's sluggish state as it embarks on the challenge of coping with enlargement.

The Commission, which is supposed to tug national governments toward greater integration, is also suffering serious adjustment problems that represent, in some ways, a microcosm of the difficulties involved in linking 12 countries with disparate political, economic and cultural backgrounds.

The executive Commission will be expanded to 17 members, which many feel is far too unwieldy for a board that is supposed to promote dynamic initiatives to further European union. The large countries -- France, West Germany, Britain, Italy and Spain -- are allotted two representatives each, and for political reasons there is reluctance to reduce the size of the Commission to a more compact number.

"It's a dilemma between efficiency and representing the major political forces," said Natali, one of two Italian commissioners. "Some want fewer commissioners, but the community should be a political organism with many voices, not a handful of specialists locked in an ivory tower."

To make room for about 1,300 Spanish and Portuguese officials who will join the administration, an equal number will be pared from among other nationalities. There will be more of a bureaucratic tower of Babel, for documents and reports now will have to be translated into nine instead of seven languages, with sundry permutations for interpreting meetings of visiting ministers, trade union leaders and industrial experts.

Nearly half of the community's 15,000 officials soon will be absorbed in language translation tasks alone. This desperate situation has prompted the EC Commission to explore the idea of computerized translation to handle what could become an impossible workload. But the plan has met little success, because idioms often lead to grossly incorrect interpretations, officials said.