That was the first contact of these two societies in Europe- so close, yet so different- long before the European Union.

Is how I would put it without departing too far from your original, but I would probably put the parethesis in brackets rather than between hyphens.

For a better flow:

"Long before the existence of the European Union, these two societies - both European, yet so different - had come into contact for the first time."

That was the first contact in Europe (long before the European Union) of these two societies; so close, yet so different.

By the way - I'm going out on a limb here, but I have to ask:

Are you by chance referring to some sort of 'treaty' and not just 'contact'? Because this sentence - and the variants proffered by my esteemed colleagues - sounds a bit weird.

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Note added at 49 mins (2004-05-17 19:06:01 GMT)
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Uh.. before y\'all jump at me about \'sounding weird\', let me clarify. My intent is not to criticise you, but to understand the context of the post.

And in case you were wondering: Yes I have waa...ay too much time on my hands right now.

'That was the first contact between these two societies in Europe which are so close and yet so different - long before the European Union.'
I assume that by 'contact of', what is really meant is 'contact between', (although 'contact' is possibly rather a vague term here), and that both the societies in question are 'in Europe'. If this is so, I think that this is the best way of expressing it clearly.