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<SEC-DOCUMENT>0000088053-06-001153.txt : 20060908
<SEC-HEADER>0000088053-06-001153.hdr.sgml : 20060908
<ACCEPTANCE-DATETIME>20060908133553
ACCESSION NUMBER:		0000088053-06-001153
CONFORMED SUBMISSION TYPE:	N-CSRS
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20060630
FILED AS OF DATE:		20060908
DATE AS OF CHANGE:		20060908
EFFECTIVENESS DATE:		20060908

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			EUROPEAN EQUITY FUND, INC / MD
		CENTRAL INDEX KEY:			0000791718
		IRS NUMBER:				133354384
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-CSRS
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-04632
		FILM NUMBER:		061081253

	BUSINESS ADDRESS:	
		STREET 1:		345 PARK AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154
		BUSINESS PHONE:		800-437-6269

	MAIL ADDRESS:	
		STREET 1:		345 PARK AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GERMANY FUND INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSRS
<SEQUENCE>1
<FILENAME>sr063006_eef.htm
<DESCRIPTION>SEMIANNUAL REPORT
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY>

<div style='width:600;'>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>UNITED STATES</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>WASHINGTON, D. C. 20549</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>FORM N-CSRS</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>Investment Company Act file number  811-4632</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><u><font size=2>European Equity Fund, Inc.</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2> (Exact Name of Registrant as Specified in Charter)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>Two International Place</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><font size=2>Boston, MA  02110</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#4F4F4F"><font size=2>(Address of principal executive offices) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; (Zip code)</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Registrant&#146;s Telephone Number, including Area Code: </font><u><font size=2>(212) 454-7190</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Paul Schubert</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>345 Park Avenue</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><font size=2>New York, NY 10154</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Name and Address of Agent for Service)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="193" style='border-collapse:collapse'>
    <tr >
        <td width="144" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date of fiscal year end:</font></p> </td>
        <td width="49" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>12/31</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="211" style='border-collapse:collapse'>
    <tr >
        <td width="144" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date of reporting period:</font></p> </td>
        <td width="67" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>06/30/06</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>ITEM 1.</font></B><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><B><font SIZE=2>REPORT TO STOCKHOLDERS</font></B></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


</div>










<DIV class=Section1>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>[GRAPHIC]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
THE EUROPEAN</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
EQUITY FUND, INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>LETTER TO THE
SHAREHOLDERS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
European equity markets, in line with global trends, experienced a</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>difficult second quarter
as investors started to question the sustainability of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>economic growth on the
back of further central bank tightening, particularly in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the US. In the subsequent
wave of profit-taking and withdrawal from risk</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>positions, the
performance patterns of the earlier months of the year reversed</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and market segments
associated with cyclicality suffered the most: the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>industrials, technology,
financials and consumer discretionary sectors, small</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and mid-cap stocks and
stocks with sizeable emerging markets exposure. Among</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>European countries, the
Fund's focus markets of the European Monetary Union</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(EMU) were comparatively
weak with the MSCI EMU declining by 4.2%.(1) Germany</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and the Netherlands
delivered the worst performance of the larger markets while</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Spain fared better.
Outside EMU, the UK market proved to be defensive while</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Sweden corrected more
strongly. The Fund's preferred non-EMU markets,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Switzerland and Norway,
showed performance similar to the overall European</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>market.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
For the six months ended June 30, 2006, the European Equity Fund's
total</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>return was 15.31% (not
annualized) based on net asset value and 16.81% (not</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>annualized) based on
share price. During the same period, the Fund's benchmark*</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>gained 14.35% (not
annualized).</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
In the first half of 2006, the Fund's good relative performance
mainly</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>resulted from the
application of several key strategic themes, including a</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>preference for industrial
and energy stocks. In addition, the Fund's holdings in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the financials sector
boosted performance. The Fund's performance was hindered</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>by the sharp correction
in the mid-cap segment, to which the Fund is more</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>exposed than its
benchmark. In the industrials sector, the Fund sold the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>remainder of its position
in Solarworld after the stock's strong performance.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The proceeds were used to
rebuild a position in Metso, which had suffered unduly</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>in the market correction,
providing an attractive re-entry opportunity. One of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the key contributors to
performance among the Fund's industrials holdings was</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Vallourec, a pipe
producer in the oil services sector. Within the energy sector,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the preference is still
with the oil services stocks. However, the Fund has</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>reduced its positions in
Saipem and Acergy after their strong performance,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>reinvesting the proceeds
in Cie Fen de Geophysiq, a French oil exploration</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>company, and Total, one
of our preferred oil majors. The Fund's holdings in the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>financial sector continue
to be a key source of strong relative performance,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>despite the
underperformance of Hypo Real Estate and Efg Eurobank during the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>second quarter. In
particular, the Fund's cautious stance on ABN Amro and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Allianz contributed
strongly to the Fund's relative performance during the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>second quarter.
Healthcare company Essilor International, which is the global</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>leader in corrective
eyeglass lenses, also contributed positively to the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>relative performance.
Among technology stocks, Ericsson reduced the Fund's</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>relative performance
during the second quarter, but remains a key holding for</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>its exposure to emerging
markets and new application growth in mobile</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>infrastructure.
Performance during the second quarter was also hindered by the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Fund's position in
DaimlerChrysler, which underperformed the benchmark; the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>company is in the midst
of a restructuring that should enhance shareholder</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>value.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
On a country level, the Fund continued to reduce its exposure to
German</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>equities during the
second quarter, as the valuation gap with the rest of Europe</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>has closed. However,
Germany remains the largest overweight country in the Fund,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>while the Netherlands and
Spain remain the largest underweight countries.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Switzerland, Norway, and
Sweden continue to be key ex-benchmark countries.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
The European Equity Fund resumed its open-market purchases of its
shares</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>only to a small extent by
buying 2,750 shares during the first six months of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>2006.** The</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; FOR
ADDITIONAL INFORMATION ABOUT THE FUND INCLUDING PERFORMANCE,
DIVIDENDS,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PRESENTATIONS, PRESS RELEASES,
DAILY NAV AND SHAREHOLDER REPORTS,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PLEASE VISIT www.germanyfund.com</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Fund's discount to net
asset value for the six months ending June 30, 2006</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>was 9.91%, compared with
12.87% for the same period last year.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
At their June 20, 2006 Annual Meeting, the Fund's stockholders elected
the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>four Directors who had
been proposed by the Fund's Board and management. The</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>stockholders also
ratified the Board's selection of PricewaterhouseCoopers LLP</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>as the Fund's independent
auditors for the 2006 fiscal year.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The sources, opinions and
forecasts expressed are as of July, 2006. There is no</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>guarantee that the views,
opinions and forecasts expressed herein will come to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>pass. This information is
subject to change at any time based on market and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>other conditions and
should not be construed as a recommendation for any</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>specific security. Past
performance does not guarantee future results.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(1)&nbsp; The MSCI-EMU
Index is an unmanaged capitalization-weighted index that is</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
comprised of more than 300 stocks of companies domiciled in the 12</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
countries utilizing the Euro currency. MSCI indices are calculated
using</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
closing local market prices and converted to US dollars using the
London</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
close foreign exchange rates. Index returns assume reinvested
dividends</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
and, unlike Fund returns, do not reflect any fees or expenses. It is
not</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
possible to invest directly into an index.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>*&nbsp;&nbsp;&nbsp; As of
November 1, 2005, the benchmark is the MSCI EMU Index. Prior to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
November 1, 2005, the benchmark was the DAX Index.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>**&nbsp;&nbsp; The share
buy back program was suspended for a portion of the semi-annual</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
period.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Sincerely,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>/s/ Christian
Strenger</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>--------------------------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Christian
Strenger</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Chairman</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; FOR
ADDITIONAL INFORMATION ABOUT THE FUND INCLUDING PERFORMANCE,
DIVIDENDS,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PRESENTATIONS, PRESS RELEASES,
DAILY NAV AND SHAREHOLDER REPORTS,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PLEASE VISIT www.newgermanyfund.com</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>FUND HISTORY AS OF JUNE
30, 2006</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>ALL PERFORMANCE SHOWN IS
HISTORICAL, ASSUMES REINVESTMENT OF ALL DIVIDEND AND</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>CAPITAL GAIN
DISTRIBUTIONS, AND DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>RETURN AND PRINCIPAL
VALUE FLUCTUATE WITH CHANGING MARKET CONDITIONS SO THAT,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>WHEN SOLD, SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>PERFORMANCE MAY BE LOWER
OR HIGHER THAN THE PERFORMANCE DATA QUOTED. PLEASE</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>VISIT www.germanyfund.com
FOR THE FUND'S MOST RECENT PERFORMANCE.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>TOTAL RETURNS:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&lt;Caption&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SIX MONTHS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ENDED&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE YEARS ENDED DECEMBER 31,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
JUNE 30,&nbsp;&nbsp;
- -------------------------------------------------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2006(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2004&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ----------&nbsp;&nbsp; -------&nbsp;&nbsp; --------&nbsp;&nbsp;
- --------&nbsp;&nbsp; ----------&nbsp;&nbsp; ----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net Asset
Value(a)&nbsp;&nbsp;&nbsp;&nbsp; 15.31%&nbsp;&nbsp;&nbsp;&nbsp;
7.17%&nbsp;&nbsp;&nbsp;&nbsp; 12.58%&nbsp;&nbsp;&nbsp;&nbsp;
59.62%&nbsp;&nbsp;&nbsp;&nbsp; (34.43)%&nbsp;&nbsp;&nbsp;&nbsp;
(25.57)%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Market
Value(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
16.81%&nbsp;&nbsp;&nbsp;&nbsp; 9.66%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7.25%&nbsp;&nbsp;&nbsp;&nbsp; 68.81%&nbsp;&nbsp;&nbsp;&nbsp;
(35.76)%&nbsp;&nbsp;&nbsp;&nbsp; (24.95)%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>Benchmark&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
14.35%(3)&nbsp; 8.41%(1)&nbsp; 15.91%(2)&nbsp; 65.16%(2)&nbsp; (34.14)%(2)&nbsp;
(23.20)%(2)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;/Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(a)&nbsp; Total return
based on net asset value reflects changes in the Fund's net</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
asset value during each period. Total return based on market value
reflects</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
changes in market value. Each figure includes reinvestments of dividend
and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
capital gain distributions, if any. These figures will differ
depending</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
upon the level of any discount from or premium to net asset value at
which</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
the Fund's shares trade during the period.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(b)&nbsp; Total returns
shown for the six month period are not annualized.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(1)&nbsp; Represents DAX
Index* for 1/1/05-10/31/05 and MSCI-EMU** for</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
11/1/05-12/31/05.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(2)&nbsp; Represents DAX
Index*.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(3)&nbsp; Represents
MSCI-EMU Index**.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>*&nbsp;&nbsp;&nbsp; DAX
Index is a total rate of return index of 30 selected German blue chip</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
stocks traded on the Frankfurt Stock Exchange.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>**&nbsp;&nbsp; MSCI-EMU
Index is an unmanaged capitalization-weighted index that is</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
comprised of more than 300 stocks of companies domiciled in the 12</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
countries utilizing the Euro currency.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Index returns assume
reinvested dividends and, unlike Fund returns, do not</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>reflect any fees or
expenses. It is not possible to invest directly into an</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>index.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>ON OCTOBER 27, 2005, THE
FUND ADOPTED ITS CURRENT NAME AND INVESTMENT POLICIES.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>PRIOR TO THAT DATE THE
FUND WAS KNOWN AS THE GERMANY FUND AND ITS OBJECTIVE WAS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>TO SEEK LONG-TERM CAPITAL
APPRECIATION PRIMARILY THROUGH INVESTMENTS IN GERMAN</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>EQUITIES.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Investments in funds
involve risk including the loss of principal.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>This Fund is not
diversified and primarily focuses its investments in equity</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>securities of issuers
domiciled in European countries that utilize the Euro</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>currency, thereby
increasing its vulnerability to developments in that region.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Investing in foreign
securities presents certain unique risks not associated</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>with domestic
investments, such as currency fluctuation and political and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>economic changes and
market risks. This may result in greater share price</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>volatility.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Closed-end funds, unlike
open-end funds, are not continuously offered. There is</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>a one-time public
offering, and once issued, shares of closed-end funds are sold</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>in the open market
through a stock exchange. Shares of closed-end funds</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>frequently trade at a
discount to net asset value. The price of the Fund's</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>shares is determined by a
number of factors, several of which are beyond the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>control of the Fund.
Therefore, the Fund cannot predict whether its shares will</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>trade at, below or above
net asset value.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The Fund has elected to
not be subject to the statutory calculation,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>notification and
publication requirements of the German Investment Tax Act</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(Investmentsteuergesetz).
As a result German investors in the Fund may be</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>subject to less favorable
lump-sum taxation under German law.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>STATISTICS:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net
Assets&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$134,829,343</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Shares
Outstanding&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
11,829,244</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NAV Per
Share&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.40</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIVIDEND AND CAPITAL GAIN
DISTRIBUTIONS:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;RECORD&nbsp;&nbsp;&nbsp;&nbsp;
PAYABLE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ORDINARY&nbsp;&nbsp; LT CAPITAL</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;
DATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INCOME&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GAINS&nbsp;&nbsp;&nbsp;&nbsp;
TOTAL</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>--------&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; ----------&nbsp;&nbsp; ------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>05/05/06&nbsp;&nbsp;
05/15/06&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.090&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.090</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>12/22/05&nbsp;&nbsp;
12/30/05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.060&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.060</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>12/22/04&nbsp;&nbsp;
12/31/04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.025&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.025</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>05/06/04&nbsp;&nbsp;
05/14/04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.039&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.039</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>11/19/02&nbsp;&nbsp;
11/29/02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.010&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.010</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>11/19/01&nbsp;&nbsp;
11/29/01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.060&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.060</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>09/03/01&nbsp;&nbsp;
09/17/01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $0.020&nbsp;&nbsp;&nbsp;&nbsp;
$0.020</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>11/20/00&nbsp;&nbsp;
11/29/00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $2.180&nbsp;&nbsp;&nbsp;&nbsp;
$2.180</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>09/01/00&nbsp;&nbsp;
09/15/00
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$0.190&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.120&nbsp;&nbsp;&nbsp;&nbsp; $0.310</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>OTHER
INFORMATION:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NYSE Ticker
Symbol&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
EEA</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NASDAQ
Symbol&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
XEEAX</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Dividend Reinvestment
Plan&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Yes</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Voluntary Cash Purchase
Program&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Yes</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Annualized Expense Ratio
(6/30/06)*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.70%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>*&nbsp;
&nbsp;&nbsp;Represents expense ratio before custody credits. Please see
"Financial</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
Highlights" section of this report.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>PORTFOLIO BY MARKET
SECTOR AS OF JUNE 30, 2006 (AS A % OF PORTFOLIO'S</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>MARKET VALUE*)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[CHART]</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>Financials&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(34%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Health
Care&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(4%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>Industrials&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(15%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Information
Technology&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (8%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Telecommunication
Services&nbsp;&nbsp;&nbsp; (6%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>Utilities&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(4%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>Materials&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(7%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Consumer
Discretionary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (8%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Consumer
Staples&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(4%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>Energy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(10%)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;/Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>10 LARGEST EQUITY
HOLDINGS AS OF JUNE 30, 2006 (AS A % OF PORTFOLIO'S MARKET</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>VALUE*)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>1.&nbsp; Total
SA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.5</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>2.&nbsp; Societe
Generale&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.9</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>3.&nbsp;
E.ON&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.6</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>4.&nbsp; Banca Intesa
Spa&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.5</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>5.&nbsp;
Siemens&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.2</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>6.&nbsp;
DaimlerChrysler&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.1</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>7.&nbsp;
Axa&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>8.&nbsp; Capitalia
Spa&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.9</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>9.&nbsp; Hypo Real Estate
Holding&nbsp;&nbsp;&nbsp; 2.9</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>10. Compagnie De
Saint-Gobain&nbsp;&nbsp; 2.7</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>*&nbsp;&nbsp;&nbsp;
Percentage (%) of market value refers to all securities in the
portfolio,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
except cash and equivalents.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Portfolio by Market
Sector and 10 Largest Equity Holdings are subject to change.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Following the Fund's
fiscal first and third quarter-end, a complete portfolio</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>holdings listing is filed
with the SEC on Form N-Q. The form will be available</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>on the SEC's Web site at
www.sec.gov, and it also may be reviewed and copied at</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the SEC's Public
Reference Room in Washington, D.C. Information on the operation</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>of the SEC's Public
Reference Room may be obtained by calling (800) SEC-0330.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INTERVIEW WITH THE LEAD
PORTFOLIO MANAGER -- RALF OBERBANNSCHEIDT</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
QUESTION: WHAT IS THE IMPACT OF A STRONGER EURO ON THE EUROPEAN
UNION'S</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(EU) EXPORT-DRIVEN
ECONOMY?</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
ANSWER: Given the EU's sluggish domestic demand and its position as
the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>world's leading export
economy, appreciation of the euro currency is a critical</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>factor to watch. The euro
appreciated more than 8% vs. the US dollar in the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>first half of 2006.
However, the latest trade data suggests that the recent</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>appreciation in the euro
has not yet dampened exports. Although demand from the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>US appears to have
slowed, overall export demand for European goods continued to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>increase through May,
driven by demand from emerging markets and oil-producing</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>countries, and survey
data suggests that demand will remain robust. However,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>part of the reason for
this may be that exporting companies often absorb the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>cost of short-term
currency fluctuations, rather than pass the costs on to their</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>customers. This means
that companies may see lower profit margins, especially if</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the current strength of
the euro persists.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
QUESTION: AS GERMAN CHANCELLOR ANGELA MERKEL APPROACHES HER ONE-YEAR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>ANNIVERSARY AT THE HELM,
HAS HER COALITION GOVERNMENT BEEN ABLE TO MAKE ANY</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>PROGRESS ON
REFORMS?</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
ANSWER: Criticism that Ms. Merkel's reform program seems to be
stalling</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>comes on the heels of
recent announcements by the government regarding details</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>on two reform programs --
one addressing health care and the other addressing</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>corporate taxes. After
months of negotiations, the coalition government reached</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>an agreement on a watered
down health care reform that economists believe</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>results in increased
labor costs for companies and lower disposable income for</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>households without fully
meeting the financial needs of the healthcare system.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>As far as the corporate
tax reform, the overall impact of the recently announced</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>plan will be a reduction
in the corporate tax rate from 39% to 29%, resulting in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>5 billion euros of tax
relief. However, this reduction will be financed through</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>a broadening of the tax
base to include interest payments, which could</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>discourage investment and
is expected to increase the tax burden of smaller</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>German companies, which
tend to rely more heavily on financing. Thus, Ms.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Merkel's government has
produced some reforms, but they required significant</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>compromise for the
coalition to reach agreement.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
QUESTION: VIVIANE REDING, THE EU COMMISSIONER FOR INFORMATION SOCIETY
AND</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>MEDIA, RECENTLY UNVEILED
PLANS TO REGULATE ROAMING CHARGES ON MOBILE PHONES.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>WHAT IS THE RATIONALE
BEHIND THIS MOVE TOWARD INCREASED REGULATION?</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
ANSWER: Pricing in the mobile phone market in the EU differs
significantly</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>from pricing in the US,
where roaming is often included as part of a package of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>minutes. Mobile phone
users in the EU pay international roaming charges</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>averaging $1.50 per
minute -- and depending on the location, the rates can be</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>significantly higher.
Someone from the UK, for example, could pay $4.00 per</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>minute to call home from
as close as France. This is primarily due to the fact</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>that different companies
operate the mobile networks in the various countries of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the EU. Companies such as
Vodafone in the UK, T-Mobile in Germany, and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Telefonica in Spain
charge each other wholesale prices for their customers to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>use each other's
networks. Currently, the mobile operators are not obligated to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>pass on any reduction in
wholesale prices to their customers. The plan proposed</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>by Ms. Reding is meant to
reduce prices paid by the consumer by linking the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>retail price to the
wholesale price and capping the retail price at 49 euro</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>cents per minute.
European mobile operators, who generate revenues of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>approximately $11 billion
from roaming fees, have objected to the proposed</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>regulation, saying that
they have recently taken measures to offer reduced</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>roaming rates to
customers. The proposal's impact on mobile operators' bottom</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>line is somewhat
uncertain, as reduced per minute roaming rates could result in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>a higher volume of calls,
but is expected to be negative overall. More</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>importantly, mobile
operators contend that the regulation will stifle innovation</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and discourage investment
in faster networks. This comes at a time when EU</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>regulation also puts the
brakes on incentives for fixed line network upgrades.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The plan, which is
subject to approval by the European Parliament, could go into</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>effect within a
year.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The sources, opinions and
forecasts expressed are as of July, 2006. There is no</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>guarantee that the views,
opinions and forecasts expressed herein will come to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>pass. This information is
subject to change at any time based on market and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>other conditions and
should not be construed as a recommendation for any</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>specific security. Past
performance does not guarantee future results.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>ECONOMIC
OUTLOOK</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
The recent equity market correction has put the macroeconomic debate
over</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>growth and inflation back
into focus. The concerns are the same as before in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>similar market phases:
economic growth is feared to slow down more than expected</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>as the major central
banks may fight accelerating inflation more aggressively.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Yet, evidence for such a
scenario from actual data is scarce. As expectations</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>are adjusted to reflect
those concerns and investors scale down their risks,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>particularly in the
hitherto popular spread trades, the market is clearing some</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>liquidity and
momentum-driven exaggerations, providing a sound base for advances</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>on the back of benign
fundamentals: while global economic growth is likely to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>moderate it should remain
robust enough to support further earnings growth in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the corporate
sector.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
Despite the volatility in the equity markets, European leading
indicators</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>continue to climb (the
German Ifo, for example, reached a 15-year high in June),</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>fueling optimism for
potential upwards revisions to GDP growth.(1) We continue</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>to see variations across
Euroland, with industrial production in Germany, for</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>example, picking up while
it contracted in France. In addition, the French INSEE</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>was the one European
indicator that declined in June. However, the services</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>sector is doing better in
France than Germany.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
We expect Euroland growth of about 2% for the remainder of the year;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>however, for 2007 the
combination of the ECB hiking cycle, a less positive</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>export contribution to
growth and fiscal consolidation from local governments</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>could put pressure on the
recent improvements. Although inflation remains above</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the ECB's 2% target due
to the impact of higher energy prices, the core rate</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>remains
contained.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
The European Central Bank (ECB) raised interest rates by 0.50% in the
first</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>half of 2006. Although we
expect another 0.50% hike in the second half of the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>year, we believe that the
ECB does not want to jeopardize the economic recovery</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and that any sign of a
deterioration in the economic outlook could mean the end</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>of the rate hike cycle.
This will have to be balanced as energy prices remain</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>high and optimism rises
for above-trend GDP growth.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(1)&nbsp; The Ifo
Business Climate Index is a closely watched indicator of German</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
business conditions, based on a monthly survey of about 7,000 companies.
It</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
is widely seen as a barometer for economic conditions in the whole of
the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
Eurozone, which is a term used to describe the 11 EU countries that
joined</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
the third stage of EMU and adopted the euro. The Eurozone, or
Euroland</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
countries are Austria, Belgium, Finland, France, Germany, Ireland,
Italy,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
Luxembourg, The Netherlands, Portugal and Spain.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The sources, opinions and
forecasts expressed are as of July, 2006. There is no</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>guarantee that the views,
opinions and forecasts expressed herein will come to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>pass. This information is
subject to change at any time based on market and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>other conditions and
should not be construed as a recommendation for any</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>specific security. Past
performance does not guarantee future results.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>THE EUROPEAN EQUITY FUND,
INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SCHEDULE OF INVESTMENTS
- -- JUNE 30, 2006 (UNAUDITED)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;
SHARES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DESCRIPTION&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
VALUE</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN GERMAN
SECURITIES - 23.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMON STOCKS - 22.2%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AUTOMOBILES - 3.1%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
84,000&nbsp;&nbsp;
DaimlerChrysler&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$ 4,147,332</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CHEMICALS - 1.0%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
17,200&nbsp;&nbsp; K +
S&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,386,488</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ELECTRIC UTILITIES - 3.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
41,000&nbsp;&nbsp;
E.ON&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,717,237</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ELECTRONIC EQUIPMENT &amp; INSTRUMENTS - 1.6%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
17,000&nbsp;&nbsp; Wincor
Nixdorf&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,171,684</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INDUSTRIAL CONGLOMERATES - 3.1%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
48,100&nbsp;&nbsp;
Siemens&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,182,254</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INDUSTRIAL GASES - 1.1%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
19,000&nbsp;&nbsp;
Linde&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,463,105</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MACHINERY - 0.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
17,000&nbsp;&nbsp; Rheinmetall
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,184,377</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
REAL ESTATE - 2.8%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
62,500&nbsp;&nbsp; Hypo Real Estate
Holding&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,793,561</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SOFTWARE - 2.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
16,000&nbsp;&nbsp;
SAP&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,374,184</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TEXTILES, APPAREL &amp; LUXURY GOODS - 2.6%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
74,400&nbsp;&nbsp; Adidas
Salomon&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,554,488</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Common Stocks</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$16,155,293)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
29,974,710</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PREFERRED STOCKS - 1.6%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
HEALTHCARE PROVIDERS &amp; SERVICES - 1.6%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
13,000&nbsp;&nbsp; Fresenius</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Cost
$1,426,469)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,164,143</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
RIGHTS - 0.1%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CHEMICALS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
19,000&nbsp;&nbsp; Linde AG - Rights</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Cost
$0)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
73,337</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in German Securities</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$17,581,762)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
32,212,190</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
AUSTRIAN</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 3.2%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMERCIAL BANKS -- 1.0%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
21,750&nbsp;&nbsp; Wiener Staedt Vers.+&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$
1,278,739</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CONSTRUCTION MATERIALS - 1.0%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
28,300&nbsp;&nbsp; Wienerberger
Ag+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,349,150</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INSURANCE - 1.2%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
50,000&nbsp;&nbsp; Uniqa
Versicherungen&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,623,187</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in Austrian Common Stocks</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$3,789,263)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,251,076</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
DUTCH</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 1.3%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOOD &amp; STAPLES RETAILING - 1.3%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
40,169&nbsp;&nbsp; Koninklijke Numico Nv*</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Cost
$1,686,405)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,801,521</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
FRENCH</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 29.3%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AIRLINES - 1.7%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
40,000&nbsp;&nbsp; Zodiac
SA*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,247,922</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BEVERAGES - 2.3%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
15,800&nbsp;&nbsp;
Pernod-Ricard&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,130,067</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CONSTRUCTION MATERIALS - 2.7%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
50,000&nbsp;&nbsp; Compagnie De
Saint-Gobain+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,572,290</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ELECTRICAL EQUIPMENT - 0.1%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
6,000&nbsp;&nbsp; Legrand
Promesses&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
168,709</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ENERGY EQUIPMENT &amp; SERVICES - 1.0%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
8,000&nbsp;&nbsp; Cie Fen de
Geophysiq&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,379,326</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INDUSTRIAL CONGLOMERATES - 1.7%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
20,000&nbsp;&nbsp; Neopost
SA+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,277,574</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INSURANCE - 3.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
118,100&nbsp;&nbsp;
Axa&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,873,213</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
15,000&nbsp;&nbsp; CNP
Assurances&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,425,401</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5,298,614</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp; The
accompanying notes are an integral part of the financial statements.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;
SHARES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DESCRIPTION&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
VALUE</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
METALS &amp; MINING - 1.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
2,100&nbsp;&nbsp;
Vallourec+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 2,522,969</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NATIONAL COMMERCIAL BANKS - 3.8%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
35,000&nbsp;&nbsp; Societe
Generale&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;5,144,353</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
OIL, GAS &amp; CONSUMABLE FUELS - 5.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
111,600&nbsp;&nbsp; Total
SA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7,338,620</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SPECIALTY RETAIL - 1.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
20,700&nbsp;&nbsp; Essilor
International&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,082,140</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;TELECOMMUNICATIONS SERVICES - 1.6%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
100,000&nbsp;&nbsp; France Telecom
SA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,148,486</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TEXTILES, APPAREL &amp; LUXURY GOODS - 1.6%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
22,000&nbsp;&nbsp; LVMH Moet Hennessy Loui V
Sa&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,181,972</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in French Common Stocks</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost $35,357,321)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;39,493,042</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
SWEDISH</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 2.3%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMUNICATIONS EQUIPMENT - 2.3%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
940,000&nbsp;&nbsp; Ericsson</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Cost
$3,151,496)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,105,066</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
ITALIAN</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 13.1%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMERCIAL BANKS - 8.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
800,000&nbsp;&nbsp; Banca Intesa
Spa&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,682,958</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
60,000&nbsp;&nbsp; Banca
Italease&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,005,324</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
468,000&nbsp;&nbsp; Capitalia
Spa&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,837,137</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
11,525,419</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ENERGY EQUIPMENT &amp; SERVICES - 1.0%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
59,000&nbsp;&nbsp;
Saipem+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,342,261</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
HEALTHCARE PROVIDERS &amp; SERVICES - 1.1%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
170,000&nbsp;&nbsp; Amplifon
Spa&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,445,978</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INSURANCE - 2.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
70,000&nbsp;&nbsp; Assicurazioni
Generali+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 2,548,020</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
150,000&nbsp;&nbsp; Ergo Previdenza
Spa+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
847,380</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,395,400</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in Italian Common Stocks</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$12,886,510)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
17,709,058</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
SWISS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 5.7%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DIVERSIFIED CONSUMER SERVICES - 1.3%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
1,900&nbsp;&nbsp; SGS
SA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,799,331</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ELECTRICAL DISTRIBUTION --1.1%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
117,000&nbsp;&nbsp; ABB
Ltd*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,518,736</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INSURANCE - 1.4%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
24,000&nbsp;&nbsp; Baloise Holding
- -R&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,840,803</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NATIONAL COMMERCIAL BANKS - 0.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
22,000&nbsp;&nbsp; Credit Suisse
Group&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,228,508</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TEXTILES, APPAREL &amp; LUXURY GOODS - 0.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
7,500&nbsp;&nbsp; The Swatch Group
Ag-B&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,264,389</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in Swiss Common Stocks</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$6,270,478)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7,651,767</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
FINNISH</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 2.7%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MACHINERY - 1.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
57,000&nbsp;&nbsp; METSO
OYJ&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,066,803</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PAPER MILLS - 1.2%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
75,000&nbsp;&nbsp; UPM-Kymene
Oyj&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,615,199</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in Finnish Common Stock</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Cost
$3,684,976)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,682,002</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp; The
accompanying notes are an integral part of the financial statements.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;
SHARES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DESCRIPTION&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
VALUE</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN SPANISH
COMMON STOCKS -- 5.7%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMERCIAL BANKS - 1.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
126,100&nbsp;&nbsp; Banco Bilbao Vizcaya
Argentaria&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 2,591,588</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMUNICATIONS EQUIPMENT - 1.3%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
90,000&nbsp;&nbsp; Indra Sistemas SA&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,765,695</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DIVERSIFIED TELECOMMUNICATIONS - 2.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
200,000&nbsp;&nbsp; Telefonica
S.A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,328,172</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in Spanish Common Stocks</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$7,181,507)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7,685,455</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
NORWEGIAN</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 3.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMERCIAL BANKS - 0.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
110,000&nbsp;&nbsp; Sparebanken
Midt-Norge&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,322,371</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DIVERSIFIED FINANCIAL SERVICES - 0.7%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
32,000&nbsp;&nbsp; Sparebanken
Rogaland+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
926,343</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;OIL, GAS &amp; CONSUMABLE FUELS - 1.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
89,000&nbsp;&nbsp; Statoil
Asa&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,526,295</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in Norwegian Common Stocks</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$6,620,738)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,775,009</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
LUXEMBOURG</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 0.8%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ENERGY EQUIPMENT &amp; SERVICES - 0.8%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
71,000&nbsp;&nbsp; Acergy SA</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Cost
$733,396)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,081,899</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN BELGIAN
COMMON STOCKS - 1.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
METALS &amp; MINING - 1.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
15,000&nbsp;&nbsp; Umicore</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Cost
$1,828,962)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,001,505</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
GREEK</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 3.9%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMERCIAL BANKS - 1.1%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
51,600&nbsp;&nbsp; EFG
Eurobank&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 1,429,795</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DIVERSIFIED FINANCIAL SERVICES - 1.0%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;
85,000&nbsp;&nbsp; Hellenic Exchanges
SA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,366,672</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.8%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
110,000&nbsp;&nbsp; Hellenic Telecommunications Organization SA*
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,420,977</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in Greek Common Stocks</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$4,877,153)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5,217,444</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENTS IN
IRISH</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; COMMON
STOCKS - 1.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMERCIAL BANKS - 1.5%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
131,000&nbsp;&nbsp; Anglo Irish Bank Corp Plc</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Cost
$1,792,090)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,034,288</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in Common Stocks -</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$107,442,057)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
132,701,322</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SECURITIES LENDING
COLLATERAL - 11.6%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>15,637,163&nbsp;&nbsp;
Daily Assets Fund Institutional, 5.1%++</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$15,637,163)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
15,637,163</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments - 110%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$123,079,220)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
148,338,485</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Liabilities in excess of cash and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
other assets -
(10.0)%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13,509,142)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NET
ASSETS-100.0%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$ 134,829,343</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
=============</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>*&nbsp;&nbsp;&nbsp;
Non-income producing security.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>+&nbsp;&nbsp;&nbsp; All
or a portion of these securities were on loan. The value of all</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
securities loaned at June 30, 2006 amounted to $15,359,298 which is
11.4%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
of the net assets.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>++&nbsp;&nbsp; Represents
collateral held in connection with securities lending Daily</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
Assets Fund Institutional, an affiliated fund, is managed by Deutsche
Asset</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
Management, Inc. The rate shown is the annualized seven-day yield at
period</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
end.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp; The
accompanying notes are an integral part of the financial statements.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>THE EUROPEAN EQUITY FUND,
INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>STATEMENT OF ASSETS AND
LIABILITIES</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>JUNE 30, 2006
(UNAUDITED)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>ASSETS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Investments in
securities, at value, (cost $107,442,057) --</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; including
$15,359,298 of securities
loaned&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$132,701,322</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Investment in Daily
Assets Fund Institutional</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; (cost
$15,637,163)*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
15,637,163</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Cash and foreign currency
(cost
$2,620,071)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,657,857</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Dividends
receivable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
362,975</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Interest
receivable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
20,189</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Foreign withholding tax
refund
receivable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
38,980</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Other
assets&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8,297</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Total
assets&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;151,426,783</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>LIABILITIES</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Payable upon return of
securities
loaned&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
15,637,163</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Payable for securities
purchased&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
638,198</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Management fee
payable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
60,914</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Investment advisory fee
payable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
33,828</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Payable for Directors'
fees and expenses&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29,307</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Other accrued expenses
and
payables&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
198,030</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Total
liabilities&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,597,440</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net assets, at
value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$134,829,343</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
============</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NET ASSETS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net assets consist
of:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Paid-in capital $.001 par
(Authorized
80,000,000)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$162,120,636</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Cost of 5,020,032 shares
held in
Treasury&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(41,076,815)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Undistributed net
investment
income&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;656,092</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net unrealized
appreciation of investments and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; foreign
currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
25,297,051</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Accumulated net realized
loss on investments and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; foreign
currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12,167,621)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net assets, at
value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$134,829,343</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net asset value per share
($134,829,343 / 11,829,244 shares of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; common stock
issues and
outstanding)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.40</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
============</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>*&nbsp;&nbsp;&nbsp;
Represents collateral on securities loaned.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp; The
accompanying notes are an integral part of the financial statements.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
11</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>THE EUROPEAN EQUITY FUND,
INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>STATEMENT OF OPERATIONS
(UNAUDITED)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOR
THE SIX</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MONTHS ENDED</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
JUNE 30, 2006</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NET INVESTMENT
INCOME</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Investment
Income</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Dividends
(net of foreign withholding taxes of
$428,553)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $ 2,713,319</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Securities
lending income, including income from Daily</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Assets Fund Institutional, net of borrower
rebates&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
174,489</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
Interest&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10,002</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Total investment
income&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,897,810</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Expenses:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Management
fee&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
387,947</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Investment
advisory
fee&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;214,658</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Custodian
and Transfer Agent's fees and
expenses&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
84,875</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Audit
fee&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
33,045</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Legal
fees&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;116,450</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Directors'
fees and
expenses&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
64,197</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Reports to
shareholders&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
159,900</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; NYSE listing
fee&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
798</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
Miscellaneous&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
60,545</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Total
expenses before custody
credits&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,122,415</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Less:
custody
credits*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(3,095)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Net
expenses&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,119,320</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net investment
income&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,778,490</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; AND FOREIGN
CURRENCY TRANSACTIONS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net realized gain (loss)
from:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
Investments&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8,662,384</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Foreign
currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,333,938</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net unrealized
appreciation (depreciation) during the year on:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
Investments&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5,400,530</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Translations
of other assets and liabilites from</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; foreign
currency&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45,378</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net gain (loss) on
investment and foreign currency transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
16,442,230</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$18,220,720</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
===========</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>*&nbsp;&nbsp;&nbsp; The
custody credits are attributable to interest earned on U.S. cash</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
balances held on deposit at the custodian.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp; The
accompanying notes are an integral part of the financial statements.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>THE EUROPEAN EQUITY FUND,
INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>STATEMENTS OF CHANGES IN
NET ASSETS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&lt;Caption&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SIX MONTHS ENDED&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FOR THE</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JUNE
30, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; YEAR ENDED</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(UNAUDITED)&nbsp;&nbsp;&nbsp;&nbsp; DECEMBER 31, 2005</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;----------------&nbsp;&nbsp; -----------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INCREASE (DECREASE) IN
NET ASSETS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Operations:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Net
investment income
(loss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;
1,778,490&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;&nbsp;
945,199</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Net realized
gain (loss) on:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investments&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8,662,384&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
28,976,458</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,333,938&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(37,493)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Net
unrealized appreciation (depreciation) on</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investments&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5,400,530&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(22,384,938)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Translation of other assets and
liabilities from foreign
currency&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
45,378&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(28,013)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Net increase
(decrease) in net assets resulting from
operations&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
18,220,720&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,471,213</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Distributions to
shareholders:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; From net
investment
income&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(1,064,879)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;(709,920)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Fund share
transactions:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Cost of
shares tendered (0 and 2,957,998 shares,
respectively)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (27,642,494)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Cost of
shares repurchased (2,750 and 183,700 shares,
respectively)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(26,922)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1,455,397)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Net increase
(decrease) in net assets from capital share
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(26,922)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (29,097,891)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Increase
(decrease) in net
assets&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17,128,919&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(22,336,598)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Beginning of
year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
117,700,424&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
140,037,022</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>End of year (including
undistributed net investment income</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; of $656,092
and distributions in excess of net investment income of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; $57,519, as
of June 30, 2006 and December 31, 2005,
respectively)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$134,829,343&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $117,700,424</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;============&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
============</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;/Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp; The
accompanying notes are an integral part of the financial statements.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
13</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>THE EUROPEAN EQUITY FUND,
INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NOTES TO FINANCIAL
STATEMENTS -- JUNE 30, 2006 (UNAUDITED)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NOTE 1. ACCOUNTING
POLICIES</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The European Equity Fund,
Inc. (formerly The Germany Fund, Inc.) (the "Fund")</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>was incorporated in
Delaware on April 8, 1986 as a diversified, closed-end</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>management investment
company. Investment operations commenced on July 23, 1986.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The Fund reincorporated
in Maryland on August 29, 1990 and on October 16, 1996</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the Fund changed from a
diversified to a non-diversified company.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The following is a
summary of significant accounting policies followed by the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Fund in the preparation
of its financial statements. The preparation of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>financial statements in
accordance with accounting principles generally accepted</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>in the United States of
America requires management to make estimates and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>assumptions that affect
the reported amounts and disclosures in the financial</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>statements. Actual
results could differ from those estimates.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SECURITY VALUATION:
Investments are stated at value. All securities for which</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>market quotations are
readily available are valued at the last sales price on</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the primary exchange on
which they are traded prior to the time of valuation. If</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>no sales price is
available at that time, and both bid and ask prices are</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>available, the securities
are valued at the mean between the last current bid</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and ask prices; if no
quoted asked prices are available, they are valued at the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>last quoted bid price.
All securities for which market quotations are not</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>readily available will be
valued as determined in good faith by the Board of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Directors of the Fund.
The Fund calculates its net asset value per share at</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>11:30 a.m., New York
time, in order to minimize the possibility that events</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>occurring after the close
of the securities exchanges on which the Fund's</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>portfolio securities
principally trade would require adjustment to the closing</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>market prices in order to
reflect fair value.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SECURITIES TRANSACTIONS
AND INVESTMENT INCOME: Securities transactions are</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>recorded on the trade
date. Cost of securities sold is calculated using the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>identified cost method.
Dividend income is recorded on the ex-dividend date and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>interest income is
recorded on an accrual basis. Such dividend income is</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>recorded net of
unrecoverable foreign withholding tax.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SECURITIES LENDING: The
Fund may lend securities to financial institutions. The</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Fund retains beneficial
ownership of the securities it has loaned and continues</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>to receive interest and
dividends paid by the securities and to participate in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>any changes in their
market value. The Fund requires the borrowers of the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>securities to maintain
collateral with the Fund consisting of liquid,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>unencumbered assets
having a value at least equal to or greater than the "Margin</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Percentage" to the value
of the securities loaned. "Margin Percentage" shall</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>mean (i) for collateral
which is denominated in the same currency as the loaned</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>securities, 102%, and
(ii) for collateral which is denominated in a currency</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>different from that of
the loaned security, 105%. The Fund may invest the cash</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>collateral into a joint
trading account in an affiliated money market fund</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>pursuant to Exemptive
Orders issued by the SEC. Deutsche Asset Management, Inc.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>receives a management fee
(.03% annual effective rate as of June 30, 2006) on</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the cash collateral
invested in the affiliated money fund. The Fund receives</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>compensation for lending
its securities either in the form of fees or by earning</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>interest on invested cash
collateral net of fees paid to a lending agent. Either</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the Fund or the borrower
may terminate the loan. The Fund is subject to all</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>investment risks
associated with the value of any cash collateral received,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>including, but not
limited to, interest rate, credit and liquidity risk</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>associated with such
investments.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>FOREIGN CURRENCY
TRANSLATION: The books and records of the Fund are maintained</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>in United States
dollars.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Assets and liabilities
denominated in Euros and other foreign currency amounts</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>are translated into
United States dollars at the 11:00 a.m. mid-point of the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>buying and selling spot
rates quoted by the Federal Reserve Bank of New York.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Purchases and sales of
investment securities, income and expenses are reported</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>at the rate of exchange
prevailing on the respective settlement dates of such</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>transactions. The
resultant gains and losses arising from exchange rate</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>fluctuations are
identified separately in the Statement of Operations, except</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>for such amounts
attributable to investments which are included in net realized</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and unrealized gains and
losses on investments.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>FUTURES CONTRACTS: A
futures contract is an agreement between a buyer or seller</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and an established
futures exchange or its clearinghouse in which the buyer or</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>seller agrees to take or
make a delivery of a specific amount of a financial</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>instrument at a specified
price on a specific date (settlement date). The Fund</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>may enter into futures
contracts as a hedge against anticipated interest rate,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>currency or equity market
changes, and for duration management, risk management</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and return enhancement
purposes.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Upon entering into a
futures contract, the Fund is required to deposit with a</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>financial intermediary an
amount ("initial margin") equal to a certain</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>percentage of the face
value indicated in the futures contract. Subsequent</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>payments ("variation
margin") are made or received by the Fund dependent upon</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the daily fluctuations in
the value of the underlying security and are recorded</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>for financial reporting
purposes as unrealized gains or losses by the Fund. When</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>entering into a closing
transaction, the Fund will realize a gain or loss equal</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>to the difference between
the value of the futures contract to sell and the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>futures contract to buy.
Futures contracts are valued at the most recent</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>settlement
price.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Certain risks may arise
upon entering into futures contracts, including the risk</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>that an illiquid
secondary market will limit the Fund's ability to close out a</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>futures contract prior to
the settlement date and that a change in the value of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>a futures contract may
not correlate exactly with the changes in the value of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the securities or
currencies hedged. When utilizing futures contracts to hedge,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the Fund gives up the
opportunity to profit from favorable price movements in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the hedged positions
during the term of the contract.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>CONTINGENCIES: In the
normal course of business, the Fund may enter into</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>contracts with service
providers that contain general indemnification clauses.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The Fund's maximum
exposure under these arrangements is unknown as this would</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>involve future claims
that may be made against the Fund that have not yet been</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>made. However, based on
experience, the Fund expects the risk of loss to be</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>remote.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>TAXES: No provision has
been made for United States Federal income tax because</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the Fund intends to meet
the requirements of the United States Internal Revenue</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Code applicable to
regulated investment companies and to distribute all of its</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>taxable income to
shareholders.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>In July 2006, the
Financial Accounting Standards Board (FASB) issued</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes -- an</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>interpretation of FASB
Statement No. 109" (the "Interpretation"). The</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Interpretation
establishes for the Fund a minimum threshold for financial</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>statement recognition of
the benefit of positions taken in filing tax returns</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(including whether the
Fund is taxable in certain jurisdictions), and requires</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>certain expanded tax
disclosures. The Interpretation is effective for fiscal</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>years beginning after
December 15, 2006. Management will begin to evaluate the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>application of the
Interpretation to the Fund and is not in a position at this</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>time to estimate the
significance of its impact, if any, on the Fund's financial</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>statements.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>At December 31, 2005, the
Fund had a net tax basis capital loss carryforward of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>approximately
$22,612,000, which may be applied against any realized net taxable</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>capital gains of each
succeeding year until fully utilized or until 12/31/2010,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the expiration date,
whichever occurs first.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIVIDENDS AND
DISTRIBUTIONS TO SHAREHOLDERS: The Fund records dividends and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>distributions to its
shareholders on the ex-dividend date. Income and capital</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>gain distributions are
determined in accordance with United States Federal</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>income tax regulations
which may differ from accounting principles generally</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>accepted in the United
States of America. These differences, which could be</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>temporary or permanent in
nature, may result in reclassification of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>distributions; however,
net investment income, net realized gains and net assets</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>are not
affected.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NOTE 2. MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENTS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The Fund has a Management
Agreement with Deutsche Investment Manager Americas</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Inc. (the "Manager"). The
Fund has an Investment Advisory Agreement with</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Deutsche Asset Management
International GmbH (the "Investment Adviser"). The</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Manager and the
Investment Adviser are affiliated companies.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
15</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The Management Agreement
provides the Manager with a fee, computed weekly and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>payable monthly, at the
annual rates of .65% of the Fund's average weekly net</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>assets up to $50 million,
and .55% of such assets in excess of $50 million. The</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Investment Advisory
Agreement provides the Investment Adviser with a fee,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>computed weekly and
payable monthly, at the annual rates of .35% of the Fund's</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>average weekly net assets
up to $100 million and .25% of such assets in excess</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>of $100 million.
Accordingly, for the period ended June 30, 2006, the combined</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>fee pursuant to the
Management and Investment Advisory Agreements was equivalent</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>to an annualized
effective rate of .91% of the Fund's average net assets.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Pursuant to the
Management Agreement, the Manager is the corporate manager and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>administrator of the Fund
and, subject to the supervision of the Board of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Directors and pursuant to
recommendations made by the Fund's Investment Adviser,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>determines the suitable
securities for investment by the Fund. The Manager also</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>provides office
facilities and certain administrative, clerical and bookkeeping</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>services for the Fund.
Pursuant to the Investment Advisory Agreement, the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Investment Adviser, in
accordance with the Fund's stated investment objectives,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>policies and
restrictions, makes recommendations to the Manager with respect to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the Fund's investments
and, upon instructions given by the Manager as to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>suitable securities for
investment by the Fund, transmits purchase and sale</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>orders, and selects
brokers and dealers to execute portfolio transactions on</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>behalf of the
Fund.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NOTE 3. TRANSACTIONS WITH
AFFILIATES</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>For the period ended June
30, 2006, Deutsche Bank AG, the German parent of the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Manager and Investment
Adviser, and its affiliates received $8,574 in brokerage</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>commissions as a result
of executing agency transactions in portfolio securities</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>on behalf of the Fund,
that the Board determined were effected in compliance</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>with the Fund's Rule
17e-1 procedures.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Certain officers of the
Fund are also officers of either the Manager or Deutsche</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Bank AG.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The Fund pays each
Director not affiliated with the Manager retainer fees plus</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>specified amounts for
attended Board and committee meetings.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NOTE 4. PORTFOLIO
SECURITIES</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Purchases and sales of
investment securities, other than short-term investments,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>for the period ended June
30, 2006 were $37,125,359 and $34,333,503,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>respectively.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NOTE 5. INVESTING IN
FOREIGN MARKETS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Foreign investments may
involve certain considerations and risks not typically</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>associated with those of
domestic origin as a result of, among others, the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>possibility of political
and economic developments and the level of governmental</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>supervision and
regulation of foreign securities markets. In addition, certain</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>foreign markets may be
substantially smaller, less developed, less liquid and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>more volatile than the
major markets of the United States.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>NOTE 6.
CAPITAL</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>During the period ended
June 30, 2006 and the year ended December 31, 2005, the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Fund purchased 2,750 and
183,700 of its shares of common stock on the open</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>market at a total cost of
$26,922 and $1,455,397, respectively. The weighted</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>average discount of these
purchased shares comparing the purchased price to the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>net asset value at the
time of purchase was 9.9% and 12.4% respectively. These</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>shares are held in
treasury.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>THE EUROPEAN EQUITY FUND,
INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>FINANCIAL
HIGHLIGHTS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Selected data for a share
of common stock outstanding throughout each of the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>years
indicated:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&lt;Caption&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE SIX
MONTHS&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE YEARS ENDED DECEMBER 31,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ENDED JUNE 30,&nbsp;&nbsp;&nbsp;&nbsp;
- ---------------------------------------------------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2006 (UNAUDITED)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2005&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;2004&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------------&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;
- -------&nbsp;&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &lt;C&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Per share operating
performance:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net asset
value:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Beginning of
year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 9.95&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;
9.35&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; 8.38&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 5.25&nbsp;&nbsp; $&nbsp; 8.02&nbsp;&nbsp;&nbsp; $&nbsp;
10.89</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; -------&nbsp;&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net investment income
(loss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..15(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..06(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.01)(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .05</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net realized and
unrealized gain (loss)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; on
investments and foreign currency</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.39&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..47&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.09&nbsp;&nbsp;&nbsp;&nbsp; (2.78)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(2.84)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; -------&nbsp;&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Increase (decrease) from
investment</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
operations&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.54&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..53&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..99&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.11&nbsp;&nbsp;&nbsp;&nbsp; (2.78)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(2.79)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;--------&nbsp;&nbsp; -------&nbsp;&nbsp;&nbsp;
- --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Increase resulting from
share
repurchases&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..00(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .01</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; -------&nbsp;&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Distributions from net
investment
income&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.09)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.06)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.06)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.05)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Distributions from net
realized&nbsp; foreign</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; currency
gains&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;--&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.01)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.01)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Distributions from net
realized long-term</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; capital
gains&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.02)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; -------&nbsp;&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Total
distributions+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.09)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.06)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.06)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.01)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.08)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; -------&nbsp;&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Increase resulting from
tender
offer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Dilution in net asset
value from dividend</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;
reinvestment&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..00(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.01)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; -------&nbsp;&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net asset
value:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp; &nbsp;End of
year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 11.40&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;
9.95&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; 9.35&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 8.38&nbsp;&nbsp; $&nbsp; 5.25&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;
8.02</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
========&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
========&nbsp;&nbsp;&nbsp;&nbsp; ========&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
========&nbsp;&nbsp; =======&nbsp;&nbsp;&nbsp; ========</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Market value:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; End of
year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 10.25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;
8.84&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; 8.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 7.63&nbsp;&nbsp; $&nbsp; 4.52&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;
7.05</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Total investment return
for the period:++</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Based upon market
value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
16.81%***&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
9.66%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.25%&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;68.81%&nbsp;&nbsp;
(35.76)%&nbsp;&nbsp;&nbsp; (24.95)%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Based upon net asset
value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
15.31%***&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7.17%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.58%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 59.62%&nbsp;&nbsp;
(34.43)%&nbsp;&nbsp;&nbsp; (25.57)%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Ratio to average net
assets:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Total expenses before
custody
credits*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.70%**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;1.74%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.58%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.77%&nbsp;&nbsp;&nbsp;&nbsp; 1.63%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.47%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net investment income
(loss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.33%****&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..70%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.13)%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..29%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..03%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .53%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp; Portfolio
turnover&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
51%**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
107%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
205%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
287%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
112%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 121%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Net assets at end of year
(000's omitted)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$134,829&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$117,700&nbsp;&nbsp;&nbsp;&nbsp; $140,037&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$130,442&nbsp;&nbsp; $84,809&nbsp;&nbsp;&nbsp; $133,793</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;/Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(a)&nbsp; Based on
average shares outstanding during the period.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(b)&nbsp; Amount is less
than $.005 per share.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>+&nbsp;&nbsp;&nbsp; For
U.S. tax purposes, total distributions consisted of:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp; &lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Ordinary income&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;
(.09)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; (.06)&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; (.06)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp; $&nbsp; (.01)&nbsp;&nbsp; $&nbsp;&nbsp; (.06)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long term capital
gains&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.02)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; -------&nbsp;&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; (.09)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;
(.06)&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;
(.06)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;
$&nbsp; (.01)&nbsp;&nbsp; $&nbsp;&nbsp; (.08)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; -------&nbsp;&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;/Table&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>++&nbsp;&nbsp; Total
return based on net asset value reflects changes in the Fund's net</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
asset value during each period. Total return based on market value
reflects</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
changes in market value. Each figure includes reinvestments of dividend
and</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
capital gain distributions, if any. These figures will differ
depending</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
upon the level of any discount from or premium to net asset value at
which</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
the Fund's shares trade during the period.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>*&nbsp;&nbsp;&nbsp; The
custody credits are attributable to interest earned on U.S. cash</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
balances. The ratio of total expenses after custody credits to average
net</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
assets are 1.69%, 1.73%, 1.57%, 1.77%, 1.63% and 1.46% for 2006,
2005,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
2004, 2003, 2002 and 2001, respectively</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>**&nbsp;&nbsp;
Annualized</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>***&nbsp; Not
Annualized</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>**** Not Annualized. The
ratio for the six months ended June 30, 2006 has not</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
been annualized since the Fund believes it would not be appropriate
because</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
the Fund's dividend income is not earned ratably throughout the
fiscal</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
year.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
17</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>THE EUROPEAN EQUITY FUND,
INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>REPORT OF STOCKHOLDERS'
MEETING (UNAUDITED)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The Annual Meeting of
Stockholders of The European Equity Fund, Inc. was held on</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>June 20, 2006. At the
Meeting, the following matter was voted upon by the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>stockholders. The
resulting votes are presented below:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>1. To elect four
Directors to serve a term of three years until their successors</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>are elected and
qualify.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NUMBER OF VOTES:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ----------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>DIRECTOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WITHHELD</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ---------&nbsp;&nbsp; --------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Dr. Kurt
Bock&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9,309,299&nbsp;&nbsp;&nbsp;
231,688</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Detlef
Bierbaum&nbsp;&nbsp;&nbsp; 9,306,352&nbsp;&nbsp;&nbsp; 234,635</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>John H.
Cannon&nbsp;&nbsp;&nbsp;&nbsp; 9,292,723&nbsp;&nbsp;&nbsp; 248,264</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Dr. Frank
Tromel&nbsp;&nbsp; 9,302,154&nbsp;&nbsp;&nbsp; 238,832</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>2. To ratify the
appointment by the Audit Committee and the Board of Directors</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>of PricewaterhouseCoopers
LLP, an independent registered public accounting firm,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>as independent auditors
for the fiscal year ending December 31, 2006.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NUMBER OF VOTES:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ----------------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AGAINST&nbsp;&nbsp; ABSTAIN</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ---------&nbsp;&nbsp; -------&nbsp;&nbsp; -------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;9,391,039&nbsp;&nbsp; 101,542&nbsp;&nbsp;&nbsp;
48,407</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>PROXY VOTING</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>A description of the
Fund's policies and procedures for voting proxies for</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>portfolio securities and
information about how the Fund voted proxies relating</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>to its portfolio
securities during the 12 month period ended June 30 is</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>available on our web site
- -- www.germanyfund.com -- (click on the "proxy voting</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>record" link in the left
hand tool bar) or on the SEC's web site at www.sec.gov.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>To obtain a written copy
of the Fund's policies and procedures without charge,</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>upon request, call us
toll free at 1-800-437-6269.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
18</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>EXECUTIVE
OFFICES</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>345 PARK AVENUE, NEW
YORK, NY 10154</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>MANAGER</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DEUTSCHE INVESTMENT
MANAGEMENT AMERICAS INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTMENT
ADVISER</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DEUTSCHE ASSET MANAGEMENT
INTERNATIONAL GMBH</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>CUSTODIAN AND TRANSFER
AGENT</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INVESTORS BANK &amp;
TRUST COMPANY</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>LEGAL COUNSEL</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SULLIVAN &amp; CROMWELL
LLP</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>PRICEWATERHOUSECOOPERS
LLP</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIRECTORS AND
OFFICERS</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>CHRISTIAN H.
STRENGER</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>CHAIRMAN AND
DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DETLEF
BIERBAUM</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>KURT W. BOCK</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>JOHN A. BULT</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>RICHARD R.
BURT</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>JOHN H. CANNON</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DR. FRANK
TROMEL</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>ROBERT H.
WADSWORTH</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>WERNER WALBROL</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>MICHAEL CLARK*</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>PRESIDENT AND CHIEF
EXECUTIVE OFFICER</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>PAUL H.
SCHUBERT</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>CHIEF FINANCIAL OFFICER
AND TREASURER</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>ELISA METZGER</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>CHIEF LEGAL
OFFICER</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>PHILIP GALLO</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>CHIEF COMPLIANCE
OFFICER</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SCOTT MCHUGH**</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>ASSISTANT
TREASURER</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>DAVID
GOLDMAN**</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SECRETARY</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>JOHN
MILLETTE**</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>ASSISTANT
SECRETARY</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>HONORARY
DIRECTOR</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>OTTO WOLFF von
AMERONGEN</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>46056 (8/06)</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>----------</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>*&nbsp;&nbsp;&nbsp;
Effective June 15, 2006.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>**&nbsp;&nbsp; Effective
July 14, 2006.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
VOLUNTARY CASH PURCHASE PROGRAM</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AND DIVIDEND REINVESTMENT PLAN</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The Fund offers
stockholders a Voluntary Cash Purchase Program and Dividend</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Reinvestment Plan
("Plan") which provides for optional cash purchases and for</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the automatic
reinvestment of dividends and distributions payable by the Fund in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>additional Fund shares.
Plan participants may invest as little as $100 in any</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>month and may invest up
to $36,000 annually. The Plan has been amended to allow</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>current shareholders, who
are not already participants in the Plan, and first</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>time investors to enroll
in the Plan by making an initial cash deposit of at</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>least $250 with the plan
agent. Share purchases are combined to receive a</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>beneficial brokerage fee.
A brochure is available by writing or telephoning the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>plan agent:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors
Bank &amp; Trust Company</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shareholder Services</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
P.O. Box 642 OPS22</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Boston, MA 02117-0642</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Tel. 1-800-437-6269</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>This report, including
the financial statements herein, is transmitted to the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>shareholders of The
European Equity Fund, Inc. for their information. This is</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>not a prospectus,
circular or representation intended for use in the purchase of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>shares of the Fund or any
securities mentioned in this report. The information</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>contained in the letter
to the shareholders, the interview with the chief</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>investment officer and
the report from the investment adviser and manager in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>this report is derived
from carefully selected sources believed reasonable. We</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>do not guarantee its
accuracy or completeness, and nothing in this report shall</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>be construed to be a
representation of such guarantee. Any opinions expressed</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>reflect the current
judgment of the author, and do not necessarily reflect the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>opinion of Deutsche Bank
AG or any of its subsidiaries and affiliates.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Notice is hereby given in
accordance with Section 23(c) of the Investment</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Company Act of 1940 that
the Fund may purchase at market prices from time to</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>time shares of its common
stock in the open market.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Comparisons between
changes in the Fund's net asset value per share and changes</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>in the DAX index should
be considered in light of the Fund's investment policy</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and objectives, the
characteristics and quality of the Fund's investments, the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>size of the Fund and
variations in the foreign currency/dollar exchange rate.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Fund Shares are not FDIC
- - insured and are not deposits or other obligations of</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>or guaranteed by any
bank. Fund Shares involve investment risk, including</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>possible loss of
principal.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
[EEA LISTED NYSE(R) LOGO]</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;Copies of this
report, monthly fact sheets and other information are available</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
at: www.germanyfund.com</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>For latest net asset
value, schedule of the Fund's largest holdings, dividend</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>data and shareholder
inquiries, please call 1-800-GERMANY in the U.S. or</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>617-443-6918 outside of
the U.S.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&lt;Page&gt;</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SUMMARY OF GENERAL
INFORMATION</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>THE FUND</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The European Equity Fund,
Inc. is a non-diversified, actively-managed Closed-End</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Fund listed on the New
York Stock Exchange with the symbol "EEA". The Fund seeks</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>long-term capital
appreciation primarily through investment in European</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>equities. It is managed
and advised by wholly-owned subsidiaries of the Deutsche</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Bank Group.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>SHAREHOLDER
INFORMATION</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Prices for the Fund's
shares are published daily in the New York Stock Exchange</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Composite Transactions
section of newspapers. Net asset value and market price</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>information are published
each Monday in THE WALL STREET JOURNAL and THE NEW</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>YORK TIMES, and each
Saturday in BARRON'S and other newspapers in a table called</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>"Closed End Funds". Daily
information on the Fund's net asset value is available</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>from NASDAQ (symbol
XEEAX). It is also available by calling: 1-800-GERMANY (in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>the U.S.) or 617-443-6918
(outside of the U.S.). In addition, a schedule of the</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Fund's largest holdings,
dividend data and general shareholder information may</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>be obtained by calling
these numbers.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>The foregoing information
is also available on our Web site:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>www.germanyfund.com.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>THERE ARE THREE
CLOSED-END FUNDS INVESTING IN EUROPEAN EQUITIES MANAGED BY</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>WHOLLY-OWNED SUBSIDIARIES
OF THE DEUTSCHE BANK GROUP:</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>-&nbsp;&nbsp;&nbsp; The
European Equity Fund, Inc.--investing primarily in equity or</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
equity-linked securities of companies domiciled in European countries
that</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
utilize the Euro currency.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>-&nbsp;&nbsp;&nbsp; The
New Germany Fund, Inc.--investing primarily in the middle market
German</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
companies and up to 20% elsewhere in Western Europe (with no more than
10%</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
in any single country).</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>-&nbsp;&nbsp;&nbsp; The
Central Europe and Russia Fund, Inc.--investing primarily in Central</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;
European and Russian companies.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>Please consult your
broker for advice on any of the above or call 1-800-GERMANY</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>(in the U.S.) or
617-443-6918 (outside of the U.S.) for shareholder reports.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>These funds are not
diversified and focus their investments in certain</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>geographical regions,
thereby increasing their vulnerability to developments in</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>that region. Investing in
foreign securities presents certain unique risks not</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>associated with domestic
investments, such as currency fluctuation, political</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>and economic changes, and
market risks. This may result in greater share price</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>volatility.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman" size=3>20957</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[GRAPHIC]</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
THE EUROPEAN</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
EQUITY FUND, INC.</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SEMI-ANNUAL REPORT</FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3></FONT>&nbsp;</P>
<P class=MsoNormal><FONT face="Times New Roman"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
JUNE 30, 2006</FONT></P></DIV>


<div style='width:600;'>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 2.</font></B></p> </td>
        <td width="136" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>CODE OF ETHICS.</font></B></p> </td> </tr></table>

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        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="100" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Not applicable.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 3.</font></B></p> </td>
        <td width="291" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>AUDIT COMMITTEE FINANCIAL EXPERT.</font></B></p> </td> </tr></table>

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    <tr >
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="100" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Not applicable.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 4.</font></B></p> </td>
        <td width="333" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>PRINCIPAL ACCOUNTANT FEES AND SERVICES.</font></B></p> </td> </tr></table>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="100" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Not applicable.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 5.</font></B></p> </td>
        <td width="325" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>AUDIT COMMITTEE OF LISTED REGISTRANTS</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="101" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Not Applicable</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 6.</font></B></p> </td>
        <td width="215" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>SCHEDULE OF INVESTMENTS</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="101" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Not Applicable</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 7. </font></B></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="100" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Not applicable.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 8. </font></B></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Portfolio Manager Team Disclosure </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The names of the persons primarily responsible for the day-to-day management of the Fund&#146;s portfolio and their business experience during at least the past five years are set forth below.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Ralf Oberbannscheidt, Director</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joined Deutsche Asset Management in 1999 and the fund in 2006.</font></p> </td> </tr></table>



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    <tr >
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Prior to that, served as senior portfolio manager for Global Equities and Global Sector head of Telecommunications, after 3 years of experience, including portfolio management at SEB Enskilda, Luxemberg and various positions at Dresdner Bank AG, Germany</font></p> </td> </tr></table>



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    <tr >
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Master&#146;s degree in business administration from the University of Trier, MBA International Business, MIIS Monterey, USA, completed bank training at Dresdner Bank, Duesseldorf</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Michael Schmidt, CFA</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Senior Fund Manager Equities; joined the Fund in 2005.</font></p>


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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Managing Director, Deutsche Asset Management, Frankfurt (since 2005); Prior thereto Director, Deutsche Asset Management (2002-2005); prior thereto Vice President, Deutsche Asset Management (2001-2002).</font></p> </td> </tr></table>



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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Head of Portfolio Management Institutional Equity (since 2005) and Head of Equity Research Europe (since 2004), Deutsche Asset Management, Frankfurt; Prior thereto Head of Global Research Team for Telecommunications (2001 &#150; 2004) as well as various positions in equity research and portfolio management (1994-2001).</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Roles and Responsibilities</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Fund is managed by a team of investment professionals employed by the Investment Manager and the Investment Advisor, who collaborate to develop and implement the Fund&#146;s investment strategy.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Investment Advisor&#146;s portfolio managers make recommendations to the Investment Manager&#146;s portfolio managers with respect to the Fund&#146;s investments; the Investment Manager&#146;s portfolio managers determine which securities are suitable for the Fund&#146;s investment. Upon instructions given by the Investment Manager&#146;s portfolio managers as to which securities are suitable for investment, the Investment Advisor&#146;s portfolio managers transmit purchase and sale orders and select brokers and dealers to execute portfolio transactions on the Fund&#146;s behalf.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font size=2>Compensation of Portfolio Managers </font></b></p>

<p style=' margin-bottom:14pt; margin-top:0pt;text-align:justify;'><font size=2>The Fund has been advised that the Investment Manager and Investment Advisor seek to offer its investment professionals competitive short-term and long-term compensation.  Portfolio managers and research professionals are paid (i) base salaries, which are linked to job function, responsibilities and financial services industry peer comparison, and (ii) variable compensation, which are linked to investment performance, individual contributions to the team and DWS Scudder&#146;s and Deutsche Bank&#146;s financial results.  Variable compensation may include a cash bonus incentive and participation in a variety of long-term equity programs (usually in the form of Deutsche Bank equity). </font></p>

<p style=' margin-bottom:14pt; margin-top:0pt;text-align:justify;'><font size=2>Bonus and long-term incentives comprise a greater proportion of total compensation as an investment professional&#146;s seniority and compensation levels increase.  Top performing investment professionals earn a total compensation package that is highly competitive, including a bonus that is a multiple of their base salary.  The amount of equity awarded under the long-term equity programs is generally based on the individual&#146;s total compensation package and may comprise from 0%-40% of the total compensation award.  As incentive compensation increases, the percentage of compensation awarded in Deutsche Bank equity also increases.  Certain senior investment professionals may be subject to a mandatory diverting of a portion of their equity compensation into proprietary mutual funds that they manage.  </font></p>

<p style=' margin-bottom:14pt; margin-top:0pt;text-align:justify;'><font size=2>To evaluate its investment professionals, the Investment Manager and Investment Advisor use a Performance Management Process.  Objectives evaluated by the process are related to investment performance and generally take into account peer group and benchmark related data.  The ultimate goal of this process is to link the performance of investment professionals with client investment objectives and to deliver investment performance that meets or exceeds clients&#146; risk and return objectives.  When determining total compensation, the Investment Manager and Investment Advisor consider a number of quantitative and qualitative factors such as: </font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 14.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>DWS Scudder performance and the performance of Deutsche Asset Management, quantitative measures which include 1, 3 and 5 year pre-tax returns versus benchmark (such as the benchmark used in the prospectus) and appropriate peer group, taking into consideration risk targets.  Additionally, the portfolio manager&#146;s retail/institutional asset mix is weighted, as appropriate for evaluation purposes.</font></p> </td> </tr></table>



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        <td width="24" valign=top style='padding:0in 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Qualitative measures include adherence to the investment process and individual contributions to the process, among other things.  In addition, the Advisor assesses compliance, risk management and teamwork skills.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr >
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other factors, including contributions made to the investment team as well as adherence to compliance, risk management, and "living the values" of the Advisor, are part of a discretionary component which gives management the ability to reward these behaviors on a subjective basis through bonus incentives.  </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In addition, the Investment Manager and Investment Advisor analyze competitive compensation levels through the use of extensive market data surveys.  Portfolio manager compensation is reviewed and may be modified each year as </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>appropriate to reflect changes in the market, as well as to adjust the factors used to determine overall compensation to promote good sustained investment performance.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font size=2>Fund Ownership of Portfolio Managers</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The following table shows the dollar range of shares owned beneficially and of record by each member of the Fund&#146;s portfolio management team in the Fund including investments by their immediate family members sharing the same household and amounts invested through retirement and deferred compensation plans.   This information is provided as of the Fund&#146;s most recent fiscal year end.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="160" valign=bottom style='border:solid black 1.0pt;border-color:gray;  padding:0in 3.0pt 0in 3.0pt;height:  28.2pt'>
            <p  align=center style='text-align:center;line-height:normal'><b><font  size=2>Name of</font></b><u><b><font  size=2> </font></b></u><br>  <b><font size=2>Portfolio Manager</font></b><u></u></p>  </td>
        <td width="149" valign=bottom style='border:solid black 1.0pt;border-color:gray;  border-left:none;padding:0in 3.0pt 0in 3.0pt;height:28.2pt'>
            <p  align=center style='text-align:center;line-height:normal'><b><font  size=2>Dollar Range of</font></b></p>
<p  align=center style='text-align:center;line-height:normal'><b><font  size=2>Fund Shares Owned</font></b><u></u></p>  </td> </tr>
    <tr style='height:13.7pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray;  border-top:none;padding:0in 3.0pt 0in 3.0pt;height:13.7pt'>
            <p  style='line-height:normal;page-break-after:avoid;  '><font size=2>Ralf Oberbannscheidt</font></p>  </td>
        <td width="149" valign=top style='border-top:none;border-left:  none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;    padding:0in 3.0pt 0in 3.0pt;height:  13.7pt'>
            <p  style='margin-top:0in;page-break-after:avoid'><font size=2>0</font></p>  </td> </tr>
    <tr style='height:14.5pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='line-height:normal'><font size=2>Michael Schmidt</font></p> </td>
        <td width="149" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='margin-top:0in'><font size=2>0</font></p> </td> </tr>
    <tr style='height:14.5pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="149" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='margin-top:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:14.5pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="149" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='margin-top:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:14.5pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="149" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='margin-top:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font size=2>Conflicts of Interest</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In addition to managing the assets of the Fund, the Fund&#146;s portfolio managers may have responsibility for managing other client accounts of the Investment Manager and Investment Advisor or its affiliates.  The tables below show, for each portfolio manager, the number and asset size of (1) SEC registered investment companies (or series thereof) other than the Fund, (2) pooled investment vehicles that are not registered investment companies and (3) other accounts (e.g., accounts managed for individuals or organizations) managed by each portfolio manager.  The tables also show the number of performance based fee accounts, as well as the total assets of the accounts for which the advisory fee is based on the performance of the account.  This information is provided as of the Fund&#146;s most recent fiscal year end.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Other SEC Registered Investment Companies Managed:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="130" valign=top style='border:solid black 1.0pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Name of Portfolio Manager</font></b></p> </td>
        <td width="108" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number of  Registered Investment Companies </font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total Assets of Registered Investment Companies</font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number of Investment Company Accounts with Performance Based Fee</font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total Assets of Performance- Based Fee Accounts</font></b></p> </td> </tr>
    <tr >
        <td width="130" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal;page-break-after:avoid'><font size=2>Ralf Oberbannscheidt</font></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$1,297,334,889</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td> </tr>
    <tr >
        <td width="130" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal'><font size=2>Michael Schmidt</font></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td> </tr>
    <tr >
        <td width="130" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="130" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="130" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Other Pooled Investment Vehicles Managed:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Name of Portfolio Manager</font></b></p> </td>
        <td width="96" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number of Pooled Investment Vehicles</font></b></p> </td>
        <td width="131" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total Assets of Pooled Investment Vehicles</font></b></p> </td>
        <td width="113" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number of Pooled Investment Vehicle Accounts with Performance-Based Fee </font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total Assets of Performance- Based Fee Accounts</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="590" style='border-collapse:collapse; '>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal;page-break-after:avoid'><font size=2>Ralf Oberbannscheidt</font></p> </td>
        <td width="96" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="131" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="113" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal'><font size=2>Michael Schmidt</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$339,959,631</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Other Accounts Managed:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="590" style='border-collapse:collapse; '>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Name of Portfolio Manager</font></b></p> </td>
        <td width="96" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number of Other Accounts</font></b></p> </td>
        <td width="131" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total Assets of Other Accounts</font></b></p> </td>
        <td width="113" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number of Other Accounts with Performance- Based Fee </font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total Assets of Performance- Based Fee Accounts</font></b></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal;page-break-after:avoid'><font size=2>Ralf Oberbannscheidt</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal'><font size=2>Michael Schmidt</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$332,756,124</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In addition to the accounts above, an investment professional may manage accounts in a personal capacity that may include holdings that are similar to, or the same as, those of the funds.  The Investment Manager and Investment Advisor have in place a Code of Ethics that is designed to address conflicts of interest and that, among other things, imposes restrictions on  the ability of portfolio managers and other &#147;access persons&#148; to invest in securities that may be recommended or traded in the funds and other client accounts.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Real, potential or apparent conflicts of interest may arise when a portfolio manager has day-to-day portfolio management responsibilities with respect to more than one fund or account, including the following: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Certain investments may be appropriate for the Fund and also for other clients advised by the Investment Manager and Investment Advisor, including other client accounts managed by the Fund&#146;s portfolio management team.  Investment decisions for the Fund and other clients are made with a view to achieving their respective investment objectives and after consideration of such factors as their current holdings, availability of cash for investment and the size of their investments generally. A particular security may be bought or sold for only one client or in different amounts and at different times for more than one but less than all clients. Likewise, because clients of the Investment Manager and Investment Advisor may have differing investment strategies, a particular security may be bought for one or more clients when one or more other clients are selling
the security. The investment results achieved for the Fund may differ from the results achieved for other clients of the Investment Manager and Investment Advisor.  In addition, purchases or sales of the same security may be made for two or more clients on the same day.  In such event, such transactions will be allocated among the clients in a manner believed by the Investment Manager and Investment Advisor to be most equitable to each client, generally utilizing a pro rata allocation methodology.  In some cases, the allocation procedure could potentially have an adverse effect or positive effect on the price or amount of the securities purchased or sold by the Fund.  Purchase and sale orders for the Fund may be combined with those of other clients of the Investment Manager and Investment Advisor in the interest of achieving the most favorable net results to the Fund and the other clients.  </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr >
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>To the extent that a portfolio manager has responsibilities for managing multiple client accounts, a portfolio manager will need to divide time and attention among relevant accounts. The Investment Manager and Investment Advisor attempt to minimize these conflicts by aligning its portfolio management teams by investment strategy and by employing similar investment models across multiple client accounts.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>In some cases, an apparent conflict may arise where the Investment Manager and Investment Advisor have an incentive, such as a performance-based fee, in managing one account and not with respect to other accounts it manages.  The Investment Manager and Investment Advisor will not determine allocations based on whether it receives a performance-based fee from the client.   Additionally, the Investment Manager and Investment Advisor have in place supervisory oversight processes to periodically monitor performance deviations for accounts with like strategies. </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Investment Manager and Investment Advisor are owned by Deutsche Bank AG, a multi-national financial services company.  Therefore, the Investment Manager and Investment Advisor are affiliated with a variety of entities that provide and/or engage in commercial banking, insurance, brokerage, investment banking, financial advisory, broker-dealer activities (including sales and trading), hedge funds, real estate and private equity investing, in addition to the provision of investment management services to institutional and individual investors.  Since Deutsche Bank AG, its affiliates, directors, officers and employees (the &#147;Firm&#148;) are engaged in businesses and have interests other than managing asset management accounts; such other activities involve real, potential or apparent conflicts of interest.   These interests and activities include potential advisory, transactional and financial
activities and other interests in securities and companies that may be directly or indirectly purchased or sold by the Firm for its clients&#146; advisory accounts.  These are considerations of which advisory clients should be aware and which may cause conflicts that could be to the disadvantage of the Investment Manager and Investment Advisor&#146;s advisory clients.  The Investment Manager and Investment Advisor have instituted business and compliance policies, procedures and disclosures that are designed to identify, monitor and mitigate conflicts of interest and, as appropriate, to report them to the Fund&#146;s Board of Directors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 9. </font></B></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="649" style='margin-left:4.55pt;border-collapse:collapse'>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='border-top:solid black 1.0pt; border-left:solid black 1.0pt;border-bottom:none;border-right:none;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-bottom:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td width="108" nowrap valign=bottom style=' border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td width="120" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-bottom:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:solid black 1.0pt; border-right:none;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Period</font></p> </td>
        <td width="108" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Number of</font><br> <font size=2>Shares</font><br> <font size=2>Purchased*</font></p> </td>
        <td width="108" nowrap valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Average Price</font><br> <font size=2>Paid per Share</font></p> </td>
        <td width="120" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Number of</font><br> <font size=2>Shares Purchased</font><br> <font size=2>as Part of Publicly</font><br> <font size=2>Announced Plans</font><br> <font size=2>or Programs</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Maximum Number</font><br> <font size=2>of Shares that May</font><br> <font size=2>Yet Be Purchased</font><br> <font size=2>Under the Plans </font><br> <font size=2>or Programs</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>January 1 through January 31</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.0000</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td>
        <td width="120" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>February 1 through February 28</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.0000</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td>
        <td width="120" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>March 1 through March 31</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.0000</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td>
        <td width="120" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>April 1 through April 30</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.0000</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td>
        <td width="120" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>May 1 through May 31</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.0000</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td>
        <td width="120" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>June 1 through June 30</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2,750</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$9.7898</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td>
        <td width="120" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:solid black 1.0pt; border-right:none;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:solid black 1.0pt; border-right:none;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total </font></p> </td>
        <td width="108" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2,750</font></p> </td>
        <td width="108" nowrap valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$9.7898</font></p> </td>
        <td width="120" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td  nowrap colspan="3" valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>* All shares were purchased in open market transactions.</font></p> </td>
        <td width="120" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="549" style='border-collapse:collapse'>
    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 10.</font></B></p> </td>
        <td width="437" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>The Nominating Committee will consider nominee candidates properly submitted by stockholders in accordance with applicable law, the Fund's Articles of Incorporation or By-laws, resolutions of the Board and the qualifications and procedures set forth in the Nominating Committee Charter and this proxy statement. A stockholder or group of stockholders seeking to submit a nominee candidate (i) must have beneficially owned at least 5% of the Fund's common stock for at least two years, (ii) may submit only one nominee candidate for any particular meeting of stockholders, and (iii) may submit a nominee candidate for only an annual meeting or other meeting of stockholders at </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<pAGE>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>which directors will be elected. The stockholder or group of stockholders must provide notice of the proposed nominee pursuant to the requirements found in the Fund's By-laws.  Generally, this notice must be received not less than 90 days nor more than 120 days prior to the first anniversary of the date of mailing of the notice for the preceding year's annual meeting. Such notice shall include the specific information required by the Fund's By-laws. The Nominating Committee will evaluate nominee candidates properly submitted by stockholders on the same basis as it considers and evaluates candidates recommended by other sources.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="337" style='border-collapse:collapse'>
    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 11.</font></B></p> </td>
        <td width="225" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>CONTROLS AND PROCEDURES.</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a) </font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Chief Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b) </font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>There have been no changes in the registrant's internal control over financial reporting that occurred during the registrant's last half-year (the registrant's second fiscal half-year in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controls over financial reporting.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="198" style='border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ITEM 12.</font></B></p> </td>
        <td width="87" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>EXHIBITS.</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)(1)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


</div>




<div style='width:600;'>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Form N-CSRS Item F</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=3>SIGNATURES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Registrant: </font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The European Equity Fund, a series of European Equity Fund, Inc.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="339" style='border-collapse:collapse'>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  nowrap colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Michael G. Clark</font></u></p> </td> </tr>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael G. Clark</font></p> </td>
        <td  width="16">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:0.5in;text-align:left;'><font size=2>President</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="317" style='border-collapse:collapse'>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date:</font></p> </td>
        <td width="125" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Registrant: </font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The European Equity Fund, a series of European Equity Fund, Inc.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="339" style='border-collapse:collapse'>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  nowrap colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Michael G. Clark</font></u></p> </td> </tr>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael G. Clark</font></p> </td>
        <td  width="16">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:0.5in;text-align:left;'><font size=2>President</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="317" style='border-collapse:collapse'>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date:</font></p> </td>
        <td width="125" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="315" style='border-collapse:collapse'>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  nowrap colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Paul Schubert</font></u></p> </td> </tr>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Paul Schubert</font></p> </td>
        <td  width="15">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:0.5in;text-align:left;'><font size=2>Chief Financial Officer and Treasurer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="317" style='border-collapse:collapse'>
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        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date:</font></p> </td>
        <td width="125" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<TYPE>EX-99.CERT
<SEQUENCE>2
<FILENAME>cert-eef.htm
<DESCRIPTION>CERTIFICATION
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<p style=' margin-bottom:3pt; margin-top:12pt;text-align:right;'><img src="img1.gif"><br> <b><font face="Arial" size=4></font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font size=2>President</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Form N-CSRS Certification under Sarbanes Oxley Act</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Michael G. Clark, certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report, filed on behalf of The European Equity Fund, a series of European Equity Fund, Inc., on Form N-CSRS;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Michael G. Clark</font></u></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=2>Michael G. Clark</font></p>  </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:5pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:5pt'><font color="#454545"><font size=2>President</font></font></p>  </td> </tr>
    <tr style='page-break-inside:avoid; height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The European Equity Fund, a series of European Equity Fund, Inc.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:right;'>
<img src="img2.gif"><br> <b><font face="Arial" size=4></font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font size=2>Chief Financial Officer and Treasurer</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Form N-CSRS Certification under Sarbanes Oxley Act</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Paul Schubert, certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report, filed on behalf of The European Equity Fund, a series of European Equity Fund, Inc., on Form N-CSRS;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Paul Schubert</font></u></p> </td> </tr>
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        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=2>Paul Schubert </font></p>  </td> </tr>
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        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:5pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:5pt'><font color="#454545"><font size=2>Chief Financial Officer and Treasurer</font></font></p>  </td> </tr>
    <tr style='page-break-inside:avoid; height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The European Equity Fund, a series of European Equity Fund, Inc.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<TYPE>EX-99.906CERT
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<FILENAME>cert906-eef.htm
<DESCRIPTION>906 CERTIFICATION
<TEXT>
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<p style=' margin-bottom:3pt; margin-top:12pt;text-align:right;'><img src="img1.gif"><br> <b><font face="Arial" size=4></font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>President</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Section 906 Certification under Sarbanes Oxley Act</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Michael G. Clark, certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report, filed on behalf of The European Equity Fund, a series of European Equity Fund, Inc., on Form N-CSRS;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge and pursuant to 18 U.S.C. &sect; 1350, the periodic report on Form N-CSRS (the &#147;Report&#148;) fully complies with the requirements of &sect; 13 (a) or &sect;15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="564" style='margin-left:5.4pt;border-collapse:collapse'>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Michael G. Clark</font></u></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=2>Michael G. Clark </font></p>  </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:5pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:5pt'><font color="#454545"><font size=2>President</font></font></p>  </td> </tr>
    <tr style='page-break-inside:avoid; height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The European Equity Fund, a series of European Equity Fund, Inc.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:right;'><img src="img2.gif"><br> <b><font face="Arial" size=4></font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font size=2>Chief Financial Officer and Treasurer</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Section 906 Certification under Sarbanes Oxley Act</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Paul Schubert, certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report, filed on behalf of The European Equity Fund, a series of European Equity Fund, Inc., on Form N-CSRS;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge and pursuant to 18 U.S.C. &sect; 1350, the periodic report on Form N-CSRS (the &#147;Report&#148;) fully complies with the requirements of &sect; 13 (a) or &sect;&nbsp;15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="564" style='margin-left:5.4pt;border-collapse:collapse'>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Paul Schubert</font></u></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=2>Paul Schubert </font></p>  </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:5pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:5pt'><font color="#454545"><font size=2>Chief Financial Officer and Treasurer</font></font></p>  </td> </tr>
    <tr style='page-break-inside:avoid; height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The European Equity Fund, a series of European Equity Fund, Inc.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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