THE momentum among EC members, led by Germany, to recognize the breakaway Yugoslav republics of Croatia and Slovenia has been slowed by UN Secretary-General Javier Perez de Cuellar.The UN chief is right to warn that recognition could ignite the ethnic tinderbox of neighboring Bosnia, where the Yugoslav Army has armed Serbs with weapons it removed from Croatia and Slovenia. Recognition is due the Yugoslav republics. That isn't in question. But when and under what terms? The best context is a negotiated settlement. Recognition during war could play into the hands of Serb President Slobodan Milosevic and the Army, who may incite a wider war. Yet Germany won't be dissuaded - only days after arguing for a future common European foreign policy at Maastricht. UN opposition to the German move has weakened. Since Croatia and Slovenia declared independence in June, too little thought has been given to cause and effect. Initial German encouragement of Croatia to secede soured when Yugoslav generals lashed back. Why give them a wider war? Why break up peace talks, feeble though they are? German assurances about Zagreb's new overnight human-rights guidelines aren't reassuring. Last May Serbs in Croatia were forced to take loyalty oaths. If, as expected, Germany is joined in recognition by Austria and the Vatican, Milosevic will have a propaganda field day. These three "dark forces" (Milosevic's term) are already demonized in official Belgrade media. Milosevic can use "aggressor Europe" to feed a Serbian persecution-inferiority complex. Moreover, if Germany and others recognize Croatia and Slovenia - why not Bosnia, Macedonia, and even the Serbian province of Kosovo, whose Serb-repressed Albanian population wants autonomy? Recognition by Germany and Austria could tend to arouse the old Hapsburg-Nazi ghosts. Not that there aren't arguments for recognition. Milosevic has been slipping in the polls. The Belgrade economy is on its back. Serb moderates campaign against isolation from Europe. Might recognition break Milosevic rather than stiffen him? Perhaps. How resolute would the Yugoslav Army be if it faced a greater threat than circa-1950 rifles? Yet the possibility of escalation exists. Recognition should be granted in concert. An oil embargo and EC sanctions against Serbia begun weeks ago may foment revolt there. The US should block Serbia. Current US sanctions against all six republics aren't fair and maintains a fiction of moral parity.