The impact on the rest of Europe is expected to be mainly psychological. The other six members of the European Free Trade Association -- Sweden, Austria, Finland, Norway, Iceland and Liechtenstein -- are still likely to help form the European Economic Area early next year.

Yet, coming only months after a crucial treaty on European union was rejected by Danish voters and only narrowly ratified by the French, the Swiss vote underlines how many ordinary Europeans are skeptical about the whole notion of European unity.

The heated campaign that preceded the vote reflected the conflicting messages -- economic opportunities and political uncertainty -- that Switzerland has received from the rest of Europe since the end of the cold war. The Pros and Cons

The country's political and economic establishment argued that the country would lose its competitive edge if it resisted the movement toward regional economic blocs. Some leading business executives and bankers even warned that investment would drop and unemployment would grow.

But opponents of integration said Switzerland's unique grass-roots democracy would be undermined if political decision-making was transferred to the community's headquarters in Brussels. They also insisted that the country would remain an appealing financial haven if it kept its distance.

Perhaps their most effective argument, though, was that Switzerland would soon be flooded by immigrants. With many Swiss already alarmed by the destabilizing impact of waves of refugees on neighboring Germany, this argument apparently had a strong influence in German-speaking cantons.

The 19-member economic area was approved in April when the European Free Trade Association decided to join the single market being established on Jan. 1, 1993, by the community, with goods, services, capital and people moving freely through a vast and prosperous region.

The governments in Switzerland, Sweden, Austria and Finland saw this as the antechamber to the community and had planned to start entry negotiations next year. Now, however, while the rest of Western Europe heads towards closer economic ties, Switzerland has chosen the opposite direction.