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<PAGE> PAGE 2
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SIGNATURE JOSEPH P. CARUSONE
TITLE VICE PRESIDENT
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Securities Purchased in Underwritings Involving
Transactions with Donaldson, Lufkin, & Jenrette Securities Corporation
Subject to Rule 10f-3 Under the Investment Company Act of 1940
10f-3 TRANSACTIONS FOR THE PERIOD AUGUST 1, 1998 THROUGH JULY 31, 1999
ALLIANCE NEW EUROPE FUND
Shares
Purchased
Date Shares Price per by Fund
Security* Purchased Purchased Share Group
United Pan
Europe Comm. 02/12/99 12,000 29.00 (EUR) 48,250
Repsol SA 07/07/99 31,000 19.95 (EUR) 2,577,800
% of
Total Offering
Shares Purchased Shares
offered By Purchased Held
(000) Group(1) From 07/31/99
40,000 0.12% Goldman Sachs 109,000
57,000 4.52% Goldman Sachs Europe 256,000
* Unless otherwise indicated, the securities were part of an issue
registered under the Securities Act of 1933 and offered to the public.
** Indicates the purchase of an Eligible Rule 144A Security.
1. Purchases by all Alliane Funds, including the Fund, may not exceed:
a) if purchased in an offering other than an Eligible Rule 144A
Offering, 25% of the principal amount
b) if purchased in an Eligible 144A Offering, 25% of the total of
(i) the principal amount of the offering of such class sold by
underwriters or members of the selling syndicate to qualified
institutional buyers, plus (ii) the principal amount of the
offering of such class in any concurrent public offering.
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, 1999, 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, and 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 internal control would not necessarily disclose all
matters in 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 specific 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 internal control and its operation,
including controls for safeguarding securities, that we consider to be
material weaknesses as defined above at July 31, 1999.
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 and is not intended to be and should not
be used by anyone other than these specified parties.
ERNST & YOUNG LLP
September 8, 1999
