THE cliffhanging crisis in Yugoslavia is more than a local boiling over of ethnic passion and economic frustration. It is the collision of greater forces powerfully on the move as the 20th century ends. On the one hand, survival in a shrinking world demands closer cooperation. On the other hand, the calls for individual freedom, self-determination, and political democracy are centrifugal.The Soviet Union is in the middle of this storm. The winds of change also sweep Eastern Europe; but they are buffeting Yugoslavia in a way that arouses everyone's worst fears. Except, it must be noted, for one. In post-cold-war Europe, this country of South Slavs on the Balkan Peninsula is no longer the powder keg of old. The great power entanglements that set the continent's armies almost automatically in motion a month after Austria's Grand Duke Franz Ferdinand was assassinated on June 28, 1914, are an cient history. Europe follows the present drama with great concern as a test case on a smaller, containable scale. Yugoslavia can show how the troubles besetting the old Soviet empire may be handled for better or for worse. The Yugoslav state is a contrivance, torn by hatred and suspicion. Marshal Josip Broz Tito stitched it together in guerrilla war against Hitler's Germany and later repelled Stalin's attempt to take it over. But Tito never institutionalized unity. His prestige was the cement and he used the Communist Party and the Army to keep things in order. Inevitably, communist economics led to fiscal disaster and moved Slovenia and Croatia, the most prosperous of six republics, to escape. Although elections were the usual fraud, Tito loosened the prewar system into a federal system. As a native Croat, he mistrusted the inclination of Serbia to dominate the whole as a Greater Serbia. After his death in 1980, this ambition became ever more apparent. Serbia's means were the old ones, the party and the Army. Some 70 percent of Army officers are Serbs, and the ir centralist sympathies are enhanced by generous pay and perks. In the recent fighting, the Army has sometimes seemed a rogue force outside civil control, unless it were Serbian. Belgrade, being both the federal and the Serbian capital, made it easier for Serbia to influence the central economic and security apparatus. Slovenia and Croatia, providing half the country's budget and most of its foreign exchange, complained to no avail. Politically, Serbia is in the hands of its president, Slobodan Milosevich, a communist and talented demagogue who plays on Serbian chauvinism. History has helped him. The sizeable Serb minority in Croatia and their compatriots remember the brutality of the wartime Croatian regime installed by Nazi Germany. In illegally seizing the autonomous province of Kosovo, with its large ethnic Albanian majority, Milosevich found historical fig leaves from medieval times. He found no such excuse to take the province of Vojvodina and its large non-Serb minority but did so with old-fashioned threats and bribes. He is now bullying Slovenia and, especially, Croatia. THE European Community (EC), uncertain what to do, has prescribed a cooling off period. Washington has favored the status quo in the name of stability, but the signs are that the bottom has not yet been reached. The ethnic Albanians of Kosovo, for instance, had not engaged in subversion and separatism as Belgrade charged. Moth-eaten Albania across the border was no attraction. Now, however, a new active connection may easily grow between the people of Kosovo resentful of Serbian domination and their sympathetic Albanian kinsmen. Still, if the main actors, Slovenia, Croatia, and Serbia, look into the abyss of disintegration and civil war, they may shrink back. A confederation, with full cultural autonomy and sensibly defined mutual obligations, is an alternative. Secession would not serve even industrious and ethnically homogeneous Slovenia, which could neither join nor compete with the EC. Force can solve nothing; neither can intervention. The Yugoslavs themselves must devise some new form of pluralistic/unitary coexistence. It would meet the needs of the age and could show others what to do.