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SIGNATURE WILLIAM A. MINOVICH
TITLE ASST. TREASURER
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Report of Independent Auditors
To the Shareholders and Board of Directors of
Alliance New Europe Fund, Inc.
In planning and performing our audit of the financial statements of Alliance
New Europe Fund, Inc. for the year ended July 31, 1998, we considered its
internal control, including control activities for safeguarding securities,
in order to determine our auditing procedures for the purpose of expressing
our opinion on the financial statements and to comply with the requirements
of Form N-SAR, not to provide assurance on the internal control.
The management of Alliance New Europe Fund, Inc. is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to assess
the expected benefits and related costs of controls. Generally, controls
that are relevant to an audit pertain to the entity's objective of preparing
financial statements for external purposes that are fairly presented in
conformity with generally accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized acquisition, use or
disposition.
Because of inherent limitations in internal control, errors or fraud may
occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control would not necessarily disclose all
matters in the internal control that might be material weaknesses under
standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce
to a relatively low level the risk that errors or fraud in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses as
defined above at July 31, 1998.
This report is intended solely for the information and use of the board of
directors and management of Alliance New Europe Fund, Inc. and the
Securities and Exchange Commission.
ERNST & YOUNG LLP
September 9, 1998
ALLIANCE NEW EUROPE FUND, INC.
77.I
In 1996, the Fund issued a new class of shares, Advisor Class shares.
Advisor Class shares, along with Class A, Class B, Class C shares each
represent an interest in the same portfolio of investments of the Fund,
have the same rights and are identical in all respects, except that
(i) Class A shares bear the expense of the initial sales charge (or
contingent deferred sales charge, when applicable) and Class B and
Class C shares bear the expense of the deferred sales charge,
(ii) Class B shares and Class C shares each bear the expense of a higher
distribution services fee than that borne by Class A shares, and Advisor
Class shares do not bear such a fee, (iii) Class B and Class C shares
bear higher transfer agency costs than that borne by Class A and Advisor
Class shares; (iv) each of Class A, Class B and Class C has exclusive
voting rights with respect to provisions of the Rule 12b-1 Plan pursuant
to which its distribution services fee is paid and other matters for
which separate class voting is appropriate under applicable law,
provided that, if the Fund submits to a vote of the Class A shareholders,
an amendment to the Rule 12b-1 Plan that would materially increase the
amount to be paid thereunder with respect to the Class A shares, then
such amendment will also be submitted to the Class B and Advisor Class
shareholders and the Class A, the Class B and the Advisor Class
shareholders will vote separately by class; and (v) Class B and Advisor
Class shares are subject to a conversion feature. Each class has
different exchange privileges and certain different shareholder service
options available.
ALLIANCE NEW EUROPE FUND, INC.
77.Q1
(1)(a) Copy of Amended and restated Articles of Incorporation - Incorporated
by reference to Exhibit 1 to Post-Effective Amendment No. 16 of Registrant's
Registration Statement on Form N-1A (File Nos. 33-37848 and 811-6028) filed
with the Securities and Exchange Commission on October 31, 1997.
(2) Amended By-Laws of the Registrant - Incorporated by reference to
Exhibit 2 to Post-Effective Amendment No. 16 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-37848 and 811-6028) filed with the
Securities and Exchange Commission on October 31, 1997.
(5) Advisory Agreement, as amended, between the Registrant and Alliance
Capital Management L.P. - Incorporated by reference to Exhibit 5 to
Post-Effective Amendment No. 16 of Registrant's Registration Statement on
Form N-1A (File Nos. 33-37848 and 811-6028) filed with the Securities and
Exchange Commission on October 31, 1997.
