Don't expect a United States of Europe any time soon. The European Community's march toward an open market by the end of 1992 has stumbled badly, the result of centuries-old differences and the special interests of massive industrial cartels.

The fact that a number of European nations are already in recession, with others likely to follow, has further slowed general economic progress.The euphoria is also gone from European stock mutual funds, which were the darlings of Wall Street a year ago. The European companies whose stocks these funds hold have struggled. Recent returns haven't even matched passbook savings yields. In addition, a stronger-than-expected U.S. dollar further depressed returns of such funds based in the United States.

Europe isn't dead, nor are European companies or economies. But while greater economic unity will eventually occur, it will take longer than initially expected. Simply observe the struggles in the uniting of Germany to realize how complicated it is to meld together different ideologies and goals.

"The lackluster performance of European funds shows there really is a difference between promise and reality," observed Don Phillips, editor of the Mutual Fund Values investment advisory, who noted that virtually all of the big fund companies have introduced European portfolios the past couple of years.

"Europe has been the weak link in the international chain, and I suppose the best that can be said is that there may be buying opportunities due to those depressed stock price levels."

European funds should be on the edges of an individual's mutual fund portfolio, providing diversity in the same manner that a health-care fund does, Phillips believes.

"Though Europe's growth is slowing, it still provides better current growth than the United States, and these funds give the investor an opportunity to get away from U.S. economic dependencies," said Jerry Mill, portfolio manager for the $77 million-asset Financial Strategic Portfolios European fund.

"While currency value remains the biggest negative for now, in the long run currency swings even out."

Mill's biggest holdings include British companies such as Smithkline Beecham and Glaxo Holdings Plc. in drugs; Grand Metropolitan in brewing; and Cable & Wireless in telecommunications. He owns stock in the Swiss Bank and Union Bank of Switzerland and in France's Alcatel Alsthom Compagnie in communications.

"We didn't expect the German economy would become as overheated, and now we see all of Europe sliding into recession," said John Hickling, portfolio manager of the $356 million-asset Fidelity Europe Fund.

"But, with prices where they are now, I wouldn't sell a European stock fund, for I see a good possibility for lower interest rates in Europe."

Hickling's biggest holdings include Germany's Bayer pharmaceutical firm; Britain's Grand Metropolitan and Whitbread brewers; France's Elf Aquitaine oil company and Switzerland's Nestle. Although hopes for 1992 were "overdone" and a "fad," with many initiatives such as a common currency pushed further into the future due to disagreements, a lot of positive agreements have nonetheless been made, Hickling said.

Among the agreements, capital can now move freely across borders and there's a single European mobile telephone system. As in the past, no one should ever count Europe out.

Top-performing European stock funds over the past 12-month period, according to Mutual Fund Values, have been:

European Plus Fund, Capstone Group, Houston; $14.5 million in assets; 4.5 percent "load" (initial sales charge); up 6.77 percent.

Merrill Lynch Eurofund "A," New York; $87 million assets; 6.5 percent load; up 2.41 percent.

Financial Strategic Portfolios - European, Invesco Funds Group, Denver; $77 million assets; no load; up 1.63 percent.

Merrill Lynch Eurofund "B," New York; $506 million assets; 4 percent deferred sales charge; up 1.41 percent.

Shearson European Fund, New York; $29 million assets; 5 percent deferred sales charge; down 0.05 percent.

T. Rowe Price European Stock Fund, Baltimore; $103 million assets; no load; down 1.15 percent.

Fidelity Europe Fund, Boston; $356 million assets; 3 percent load; down 2.17 percent.

Plymouth Europe Fund, Fidelity Investments, Boston; $20 million assets; 4.75 percent load; down 3.36 percent.