VIENNA -- Austria, sandwiched between a reunifying Germany and the rapidly changing East Bloc, is struggling to shed the constraints of its 35 years of neutrality and assume a prominent role as a firmly Western country.

The policy of nonalignment that allowed Austria to emerge from the postwar period with a strong, mixed economy and good relations with both the Soviet Union and the United States is not dead, but few Austrians see a future for it.

"Almost no one talks any longer about neutrality," Chancellor Franz Vranitzky, who has pressed strongly for Austrian membership in the European Community, said in a recent interview. Austrians, he said, are even ready "to surrender part of our own sovereignty" to join a united Western Europe.

At the same time, Vranitzky, speaking in his chancellery just 140 miles from Budapest and 150 miles from Prague, expressed no such willingness to join the newly democratic countries to his east, many of which had long historical ties to Austria before the world wars.

He dismissed talk of any Central European confederation -- he is said to view Czechoslovakia and Hungary more as potential competitors than as needy brothers -- and he rejected talk about a possible revival of the Austro-Hungarian alliance.

In Central Europe, he said, "the systems, the economic and social fabrics, are too different from country to country." Like many Western business executives, this small but wealthy country apparently has decided that, at least for the moment, the problems to the east outweigh the opportunities.

In fact, the chief danger many Austrians see in the tumultous political changes in the former Soviet Bloc is that too many Eastern Europeans will try to immigrate to this conveniently close, and economically attractive, country.

Three months before he faces reelection, Vranitzky, a Socialist who is popular with big business, has joined right-wing opponents in strong statements about the dangers of too much immigration from the East.

Although fewer than 20,000 -- mostly Romanians thus far -- have resettled in Austria since last fall's upheavals, thousands of Poles and Czechoslovaks visit Vienna to sell cheap wares at street markets. The foreigners have been blamed for a rise in the country's low crime rate that has aroused considerable public antipathy.

The result has been a surge in anti-immigrant rhetoric, especially from the right-wing Freedom Party, but now from Vranitzky's government as well. The interior minister has suggested using the army to keep out Soviet refugees.

"People are becoming xenophobic," said Vranitzky's spokesman, Karl Krammer. "Immigration is a problem for us, but we have the most liberal asylum policy in the West."

"This is mainly an emotional point," Vranitzky said in the interview. "I hope this is all. We wish to assist our neighbors in restructuring their economies. But we must be careful that the number of those who come are within boundaries that we can handle and manage."

Vranitzky, who said his country "is not scared at all of getting an even larger neighbor" to the west, as a unified Germany takes a more dominant role in European business, has focused heavily on Austria's application to join the EC. Membership in the economic and political alliance would further anchor Austria's Westward orientation, he says.

Vranitzky, who pushed the EC application through his reluctant party last year, predicts that negotiations for Austria's admittance will not come before 1993, with actual entry perhaps three years later.

Although the pace of change in the East has fed a rebirth of nationalism in Austria, not even Vranitzky's primary right-wing opponent, Freedom Party leader Joerg Haider, has embraced the idea of Austria as a third Germanic state waiting to be absorbed into a new reich.

Haider preaches cultural pan-Germanism, talking of Austrians as part of a greater German Volk, and a poll in the Vienna newspaper Der Standard found this week that he gets high marks as a figure who is "close to the people" (61 percent of those polled) and a "man of the future" (59 percent).

But the poll showed Vranitzky with equally high marks, and his campaign is trying to take the high and low roads at the same time. He is outspoken in calling for tighter immigration controls but his campaign features photos of a relaxed chancellor under the slogan "Quality of Thought."

"Haider attracts the interest and support of the people because of his uncomplicated language in criticizing the government," Vranitzky said.

Austria had to pledge itself to permanent neutrality in 1955 to win back its sovereignty after 17 years of Nazi rule and Allied occupation. Today, with borders fading and antagonisms easing, it is being forced to ask basic questions about its national identity and is searching for a role other than nonaligned island in the Cold War battlefield.