<PAGE>
--------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to present to you the Semi-Annual Report of The Europe Fund,
Inc. On June 30, 1995, the end of the period under review, the Fund's net assets
totalled $142.24 million. This represents a net asset value per share of $14.13,
a rise of 45.61% from its initial value after taking into account underwriting
discounts, commissions, offering expenses and distributions. This compares with
a 58.63% increase in the MSCI Europe Index over the same time period. At the end
of the period under review, The Europe Fund, Inc. was quoted at $12.50 per share
on the New York Stock Exchange, which represents an 11.54% discount to the
Fund's net asset value per share.
As of July 25, 1995 and July 27, 1995, the names of the Fund's Investment
Manager and Investment Adviser respectively were changed to Mercury Asset
Management International Channel Islands Ltd. and Mercury Asset Management
International Ltd. These changes resulted from the sale of the investment
banking business of S.G. Warburg Group plc (the "Warburg Group") to Swiss Bank
Corporation on July 2, 1995. As a result of the sale, on July 26, 1995 Mercury
Asset Management Group plc ("MAM"), which, previously, was 75% owned by Warburg
Group, became a fully independent company, 25% owned by existing MAM
shareholders with the balance held by Warburg Group shareholders, who prior to
the sale, indirectly owned the same shares. MAM indirectly wholly owns the
Fund's Investment Adviser, which in turn wholly owns the Fund's Investment
Manager. The sale did not result in a "change of control" of MAM, the Investment
Manager or the Investment Adviser, and none of these entities expect the sale to
affect MAM, the Fund or its shareholders in any significant manner.
James Hordern was promoted to co-portfolio manager of the Fund effective June
7, 1995. He shares these responsibilities with C. Consuelo Brooke, who has
managed the Fund since its inception. Mr. Hordern has been associated with
Mercury Asset Management plc and Warburg Investment Management International
Ltd. since September 1990 and became a portfolio manager with respect to other
client assets in December 1992.
Finally, we enclose an investment review and European market outlook together
with a summary of the major portfolio investments.
Yours sincerely,
[LOGO] [LOGO]
Anthony M. Richard J. Oldfield
Solomon President
Chairman
of the Board
<PAGE>
INVESTMENT REVIEW
During the second quarter of 1995, your Fund experienced an increase in net
asset value of 8.4% which compared with an increase of 6.4% in the MSCI Europe
Index. These results are recorded in total return and dollar-based terms.
European equity markets were strong during the quarter, driven by falling bond
yields and higher-than-expected earnings figures. The MSCI Europe Index rose
6.4% over the quarter. In US dollar terms, Scandinavia, Switzerland and Spain
were the best performing markets, while the French market was the weakest
performer. During the quarter, Chirac was elected to the French presidency and
the new right-wing government under Prime Minister Juppe was forced to introduce
a fiscally restrictive mini-budget which dampened the French market's
pre-presidential election optimism.
Although currency markets were more stable this quarter, the divergence in
economic performance between Europe's hard currency markets and the devaluers is
increasing. In soft currency countries, such as Italy and Spain, inflationary
pressures are rising, with consequent upward pressure on short rates. In
contrast, price increases in core Europe, especially Germany, have remained
subdued, but companies are experiencing a loss in competitiveness as a result of
the high exchange rate. Consumption across Europe continued to be weak, with car
sales volumes and department store sales suffering particularly. Cyclical stocks
continued to be under pressure, while financials benefited from falling bond
yields. There were several new issues during the quarter which were generally
well received.
The performance of MSCI Indices for several European markets in U.S.
dollar-based terms is listed below:
MSCI MARKETS (RATES OF RETURN TO JUNE 30, 1995)
<TABLE>
<CAPTION>
COUNTRY 12 MONTHS 3 MONTHS 1 MONTH
------------------------------------------ --------------- --------------- ---------------
<S> <C> <C> <C>
Austria................................... 1.8 6.4 1.3
Belgium................................... 21.5 6.7 0.3
Denmark................................... 10.3 7.7 -1.6
Finland................................... 68.9 34.4 14.6
France.................................... 15.6 0.6 -1.6
Germany................................... 19.7 8.2 2.9
Ireland................................... 30.3 8.0 4.5
Italy..................................... -8.3 7.5 -2.9
Netherlands............................... 29.6 6.0 1.1
Norway.................................... 27.0 11.9 4.9
Spain..................................... 11.6 15.4 1.6
Sweden.................................... 30.5 15.8 4.5
Switzerland............................... 26.5 10.0 3.0
United Kingdom............................ 19.2 3.9 0.1
</TABLE>
ECONOMIC AND MARKET OUTLOOK
The economies of core European countries will continue to recover, with sound
government finances and strong currencies having a moderating effect on any
inflationary pressures. These markets are likely to be boosted by further
reductions in interest rates as was demonstrated by the recent cuts in French
short rates. On the other hand, rapid economic growth and increasing
inflationary pressures in the peripheral economies are likely to result in
tighter monetary conditions in these countries. Corporate earnings across Europe
are expected to continue to grow strongly, improving companies' financial
position and their ability to pay dividends.
PORTFOLIO SUMMARY
During the period, the Fund purchased new holdings in Phoenix Mecano, Adia and
Phonak in Switzerland, and added to holdings in Total in France, Fust in
Switzerland, and Serco in the United Kingdom. Holdings in Standard Chartered,
Jenbacher and Arbonia Forster were sold.
2
<PAGE>
The Fund's and the MSCI Europe Index's country weightings expressed as a
percentage of total equities held at June 30, 1995 are outlined below:
<TABLE>
<CAPTION>
FUND MSCI EUROPE INDEX
--------- ---------------------
<S> <C> <C>
Austria................................................. -- % 0.8%
Belgium................................................. -- 2.4
Czech Republic.......................................... 0.1 --
Denmark................................................. -- 1.7
Finland................................................. 4.8 1.4
France.................................................. 17.8 12.7
Germany................................................. 14.5 14.4
Hungary................................................. 0.6 --
Ireland................................................. 1.5 0.6
Italy................................................... 0.9 4.4
Luxembourg.............................................. 0.8 --
Netherlands............................................. 5.0 8.1
Norway.................................................. 2.5 0.9
Portugal................................................ 1.3 --
Spain................................................... 3.1 3.5
Sweden.................................................. 9.2 3.8
Switzerland............................................. 8.2 11.3
United Kingdom.......................................... 29.7 34.0
--------- -----
100.0% 100.0%
</TABLE>
The Fund's ten largest equity holdings at June 30, 1995 were:
RHOEN KLINIKUM
The company operates 2 health care clinics, a neurological clinic, an
addiction treatment center and a cardiovascular surgery unit. The cardiovascular
surgery unit accounts for approximately 10% of heart operations in West Germany
and has the lowest mortality rate in the country. The company's profitability is
effectively underwritten by the inefficiency of its state run competitors. Rhoen
operates within the same fee structure as public hospitals and, thus, any
efficiencies achieved relative to its competitors result in improved margins.
The state system has been brought under increased pressure by the process of
reunification. This has provided a major opportunity for Rhoen Klinikum, which
has moved quickly to establish itself in eastern Germany. The company is a well
managed and rationalized provider of acute hospital services. Its expanding
range of services and geographical locations should provide solid earnings
growth in the foreseeable future.
NOKIA
Nokia, a Finnish multinational, is comprised of four business units:
telecommunications, mobile phones, consumer electronics and cable & machinery.
The company sustained losses in 1992, but after substantial restructuring in the
consumer electronics division and strong orders in the telecommunications and
mobile phone operation -- stimulated further by the benefits of the Finnish
devaluation -- the prospects have been transformed. The modest rating compared
to similar companies in the sector and the consistent flow of new orders leaves
scope for further strong performance.
TOTAL SA
Total is one of the leading French oil companies. It has the highest reserve
replacement ratio amongst its European peer group at over 200% and the second
lowest finding cost ratio. Total has a strong balance sheet and its production
profile is set to double by the year 2000 with discoveries in the Far East and
Latin America. In view of the earnings outlook, the stock is attractively
valued, relative to its European peer group.
3
<PAGE>
ASEA AB
Asea forms 50% of the Asea Brown Boveri Group (ABB), having merged its
activities with those of the Swiss industrial, Brown Boveri, in the 1980s. ABB,
which is predominately involved in the provision of infrastructure, divides its
activities between more than 1,000 companies and is present in over 130
countries worldwide. The bulk of its activities is related to the general and
subsequent distribution of power, while the remainder comprises a diverse spread
ranging from transportation and robotics to financial services. Geographically,
while predominately involved in Europe, ABB has, in recent years, sought to
expand its activities in the Far East. ABB has been proactive in switching its
manufacturing facilities from high cost countries towards lower cost countries
and is well placed to benefit from a recovery in infrastructure expenditure both
in Europe and in lesser developed countries which are experiencing a gradually
rising trend in infrastructure spending.
BUT SA
But is the second largest distributor of furniture and consumer durables in
France. The sale of Carrefour's 30% stake to institutional investors in France
and abroad has increased liquidity for what is a very interesting growth company
operating in a specialist niche area.
ROYAL BANK OF SCOTLAND
Royal Bank is an extremely well capitalized bank with a U.S. subsidiary,
Citizens, strong U.K. branch banking and corporate banking activities and a fast
growing insurance operation, Direct Line. Recovery in the former areas and rapid
expansion of the direct selling insurance business is expected to result in
exceptional earnings growth this year and next. This in turn should lead to
dividend growth significantly superior to the market.
M.L.P. (MARSCHOLLEK LAUTENSCHLAGER PARTNERS)
M.L.P. is Germany's leading independent insurance broker and provides a broad
range of insurance and financial services to university graduates in Germany,
where it holds high market shares among doctors and dentists. Strong earnings
growth by expanding its client base to graduates of other disciplines as well as
broadening the product range is expected to provide further strong earnings
growth over the coming years.
LANDIS & GYR SA
Landis & Gyr is a leading Swiss manufacturing company. Its activities can be
classified under three main categories: the building controls division, the
energy management division and the communications division, which provides
public pay telephones and security devices. Management has taken radical steps
to reorganize the group and focus on the core businesses. The company's low
valuation, strong market positions and sensitivity to the U.S. economic
recovery, should allow the benefits of the recent restructuring to flow through,
further increasing profitability.
CIPE FRANCE
Cipe is the French leader in telesurveillance with a market share exceeding
35%. It offers a complete range of services, including the supply of equipment,
installation and maintenance of telesurveillance devices. Since its founding in
1986, the company has grown by over 20% per year. Cipe has a strong balance
sheet and is expected to benefit from a continuing strong growth rate in
customer numbers, as the underdeveloped security services market in France
expands.
SOCIETE EURAFRANCE
Eurafrance is a holding company in the Lazard Group with interests in consumer
credit, insurance and property and industrial participations. The recent
flotation of Sidel, a plastic bottle machinery producer, was well received.
4
<PAGE>
-----------------------------------------------
THE EUROPE FUND, INC.
SCHEDULE OF INVESTMENTS
AS OF JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
----------------------------------------------------------
VALUE
SHARES DESCRIPTION (NOTE 1)
----------------------------------------------------------
COMMON STOCKS & WARRANTS -- 81.8%
<C> <S> <C>
CZECH REPUBLIC--0.1%
10,000 +Central European Media..... $ 148,750
--Consumer Goods
-------------
148,750
-------------
FINLAND--1.1%
53,700 Finnair Oy.................. 355,413
--Transportation Services
70,000 +Outokumpu Oy............... 1,162,328
--Metals--Diversified
60,000 +Outokumpu Oy 'A'
(Warrants)(a)............. 32,274
--Metals--Diversified
-------------
1,550,015
-------------
FRANCE--16.1%
11,500 BIC......................... 1,897,494
--Recreation & Other
Consumers
13,500 But SA...................... 3,007,116
--Services
46,059 Cipe France................. 2,422,408
--Business & Public Services
12,000 Ecco Travail Temporaire..... 806,847
--Business & Public Services
30,000 Elf Aquitaine............... 2,218,212
--Energy Sources
6,900 Esso Francaise.............. 845,334
--Energy Sources
40,000 +Michelin................... 1,772,919
--Tire & Rubber
8,000 +Pinault Printemps
Redoute................... 1,715,995
--Building Materials &
Components
6,932 Societe Eurafrance.......... 2,290,412
--Financial Services
20,000 Television Francaise........ 1,969,681
--Broadcasting & Publishing
66,000 Total SA Class B............ 3,974,838
--Energy
-------------
22,921,256
-------------
<CAPTION>
----------------------------------------------------------
VALUE
SHARES DESCRIPTION (NOTE 1)
----------------------------------------------------------
<C> <S> <C>
GERMANY--7.5%
11,440 +AGAB AG.................... $ 1,240,890
--Financial Services
1,320 +AGAB AG (Warrants)(b)...... 1,431
--Financial Services
40,000 Deutsche Bank AG............ 1,942,477
--Banking
4,200 Deutsche Pfandbrief Und
Hypothekenbank............ 2,133,690
--Banking
1,400 +DSL Holdings AG............ 182,107
--Financial Services
3,000 Felten and Guilleaume
Energie................... 561,497
--Utilities--Electric & Gas
1,750 Fresenius................... 1,214,048
--Consumer Goods
16,000 HeidelBerger Zement
(Warrants)(c)............. 229,802
--Construction
2,320 Leifheit AG................. 1,108,195
--Appliances & Household
Durables
1,260 Marschollek Lautenschlager
Partners (Ordinary)....... 876,846
--Financial Services
1,000 Rhoen Klinikum.............. 1,185,142
--Health & Personal Care
-------------
10,676,125
-------------
HUNGARY--0.6%
16,000 +Gedeon Richter............. 260,000
--Pharmaceutical
Distribution
15,000 +Pannonplast Muanyagipari... 152,400
--Consumer Goods
18,200 +Pharmavit (GDR) (1)........ 159,250
--Health & Personal Care
10,000 Primagaz Hungaria........... 241,300
--Utilities--Electric & Gas
-------------
812,950
-------------
IRELAND--1.3%
260,000 Irish Continental Group
PLC....................... 1,916,109
--Transportation--Shipping
-------------
1,916,109
-------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------
VALUE
SHARES DESCRIPTION (NOTE 1)
----------------------------------------------------------
<C> <S> <C>
ITALY--0.8%
34,500 Industrie Natuzzi SPA (ADS)
(CNV 1 Ordinary)(2)....... $ 1,142,813
--Appliances & Household
Durables
-------------
1,142,813
-------------
LUXEMBOURG--0.7%
12,000 Safra Republic Holding...... 1,020,000
--Banking
-------------
1,020,000
-------------
NETHERLANDS--4.6%
17 +A.B. Capital Fund*......... 479,391
--Financial Services
13,000 Akzo Nobel.................. 1,553,190
--Materials
150,000 Elsevier.................... 1,770,853
--Broadcasting & Publishing
5,000 Polynorm NV................. 543,836
--Metals--Steel
18,000 Ver Ned Uitgevers Bezit..... 2,154,055
--Broadcasting & Publishing
-------------
6,501,325
-------------
NORWAY--2.3%
118,750 Schibsted AS................ 1,501,216
--Broadcasting & Publishing
102,700 Vital Forsikring (Free)..... 1,747,731
--Insurance
-------------
3,248,947
-------------
PORTUGAL--1.2%
100,000 +Banco Espirito Santo
(Registered).............. 1,672,941
--Banking
-------------
1,672,941
-------------
SPAIN--2.8%
87,499 +Banco Espanol de Credito
(Registered).............. 601,601
--Banking
20,000 Banco Santander............. 787,304
--Banking
42,837 Estacion Subterraneos....... 704,533
--Services
<CAPTION>
----------------------------------------------------------
VALUE
SHARES DESCRIPTION (NOTE 1)
----------------------------------------------------------
<C> <S> <C>
82,000 Europistas Concesionaria
Espanola SA............... $ 669,250
--Business & Public Services
27,332 Europistas Concesionaria
Espanola SA (New
Shares)................... 220,819
--Business & Public Services
109,332 Europistas Concesionaria
Espanola SA (Rights)(d)... 174,859
--Business & Public Services
350,000 +Sotogrande................. 891,591
--Finance
-------------
4,049,957
-------------
SWEDEN--8.3%
45,000 Asea AB..................... 3,821,787
--Utilities--Electric
30,000 Autoliv AB.................. 1,603,749
--Electronic Components &
Capital Equipment
18,000 +Elekta AB (B Free)......... 556,571
--Electrical
2,200 Hennes & Mauritz............ 128,795
--Retail Trade
62,500 Securitas AB (Series B)..... 2,164,443
--Health & Personal Care
42,100 Svedala Industrie........... 1,133,976
--Engineering & Construction
94,000 Svenska Stal AB (Series A).. 1,091,566
--Metals--Non Ferrous
80,000 Svenska Stal AB (Series B).. 934,490
--Metals--Non Ferrous
20,000 Terra Mining (Series A)..... 365,550
--Multi-Industry
-------------
11,800,927
-------------
SWITZERLAND--7.5%
3,240 +Adia SA (Bearer)........... 672,772
--Business Services
560 Bobst AG (Bearer)........... 851,434
--Machinery & Engineering
4,410 Fust AG..................... 1,283,536
--Appliances & Household
Products
1,900 Hilti AG (Participating
Certificates)............. 1,683,753
--Industrial Components
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------
VALUE
SHARES DESCRIPTION (NOTE 1)
----------------------------------------------------------
<C> <S> <C>
3,775 Landis & Gyr SA
(Registered).............. $ 2,427,020
--Electrical & Electronics
1,950 +Phonak Holding AG.......... 1,111,381
--Electronics
1,330 Phoenix Mecano.............. 548,871
--Diversified Industrials
7,980 Rentsch (Walter) Holding
(Bearer).................. 1,345,022
--Financial Services
300 Sig Schweizerische.......... 701,129
--Engineering
-------------
10,624,918
-------------
UNITED KINGDOM--26.9%
150,000 Allied--Domecq PLC
(Ordinary)................ 1,300,266
--Beverages & Tobacco
100,000 Amersham International PLC
(Ordinary)................ 1,536,280
--Health & Personal Care
200,000 Bemrose Corp. (Ordinary).... 1,283,152
--Forest Products & Paper
Materials
415,809 Birkby (Ordinary)........... 1,019,431
--Real Estate & Finance
250,000 British Airport Authority
(Ordinary)................ 1,964,130
--Business & Public Services
259,996 +British Biotechnology Group
PLC (Ordinary)............ 2,069,568
--Health & Household
Products
30 +British Biotechnology Group
PLC (Warrants)(e)......... 27
--Health & Household
Products
250,000 Cable & Wireless
(Ordinary)................ 1,711,400
--Telephone Networks
115,915 Cadbury Schweppes PLC
(Ordinary)................ 847,023
--Food & Household Products
74,000 Domestic & General Group
(Ordinary)................ 1,519,723
--Insurance--Finance
1,400,000 +East German Investment
Trust PLC (Ordinary)...... 1,448,720
--Investment Trust
200,000 GKN PLC (Ordinary).......... 2,040,944
--Auto Parts
<CAPTION>
----------------------------------------------------------
VALUE
SHARES DESCRIPTION (NOTE 1)
----------------------------------------------------------
<C> <S> <C>
200,000 Grand Metropolitan PLC
(Ordinary)................ $ 1,227,432
--Beverages & Tobacco
150,000 Great Universal Store PLC... 1,402,950
--Retail--Special Line
500,000 Halma PLC (Ordinary)........ 1,528,320
--Machinery & Engineering
400,000 Hays PLC (Ordinary)......... 2,005,920
--Business & Public Services
265,000 Hewden--Stuart Plant PLC
(Ordinary)................ 761,493
--Construction & Housing
160,000 Jarvis Porter............... 710,669
--Forest Products & Paper
500,000 Mai PLC (Ordinary).......... 2,053,680
--Financial Services
200,000 Marks & Spencer (Ordinary).. 1,286,336
--Stores
150,000 Pearson PLC (Ordinary)...... 1,420,860
--Broadcasting & Publishing
100,000 Reuters Holding
(Ordinary)................ 833,412
--Broadcasting & Publishing
400,000 Royal Bank of Scotland
(Ordinary)................ 2,722,320
--Banking
195,000 Serco Group PLC (Ordinary).. 946,842
--Commercial Services
75,000 Thorn EMI PLC (Ordinary).... 1,558,170
--Appliances & Household
Durables
60,000 Unilever PLC (Ordinary)..... 1,215,492
--Food & Household Products
750,000 Waterford Wedgwood PLC
(Units)................... 638,790
--Food & Household Products
220,000 Wolseley PLC (Ordinary)..... 1,213,582
--Building Materials &
Components
-------------
38,266,932
-------------
Total Common Stocks & Warrants
(cost--$110,485,712)........ 116,353,965
-------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------
<C> <S> <C>
SHARES/ VALUE
FACE AMOUNT DESCRIPTION (NOTE 1)
<CAPTION>
----------------------------------------------------------
<C> <S> <C>
PREFERRED STOCKS -- 9.0%
FINLAND--3.3%
80,000 Nokia AB (Oy).............. $ 4,677,378
--Multi-Industry
-------------
4,677,378
-------------
GERMANY--5.7%
1,300 Fresenius.................. 876,499
--Consumer Goods
1,864 Krones AG (New)
(Non-Voting)............. 887,683
--Machinery & Engineering
2,590 Marscholleck Lautenschlager
Partners (Non-Voting).... 1,684,492
--Financial Services
4,511 Rhoen Klinikum
(Non-Voting)............. 4,629,007
--Health & Personal Care
-------------
8,077,681
-------------
Total Preferred Stocks
(cost--$8,959,757)......... 12,755,059
-------------
CONVERTIBLE BONDS -- 3.4%
FINLAND--0.7%
FIM4,550,000 Loundis Suomen Sah, 7.425%
due 3/29/2001............ 1,000,257
--Utilities--Electric & Gas
Energy
-------------
1,000,257
-------------
FRANCE--0.8%
FF5,331,730 Virbac, 5% due
12/31/2001............... 1,100,346
--Health & Personal Care
-------------
1,100,346
-------------
<CAPTION>
----------------------------------------------------------
VALUE
FACE AMOUNT DESCRIPTION (NOTE 1)
----------------------------------------------------------
<C> <S> <C>
NETHERLANDS--1.7%
NLG4,000,000 Draka Holding, 4.5% due
5/18/2001................ $ 2,445,004
--Finance
-------------
2,445,004
-------------
NORWAY--0.2%
NK1,200,000 Saga Petroleum, 9% due
12/31/1999............... 340,357
--Energy Source
-------------
340,357
-------------
Total Convertible Bonds
(cost--$4,497,083)......... 4,885,964
-------------
OTHER INVESTMENTS -- 0.2%
UNITED KINGDOM--0.2%
GBP215,016 Carlton Communications PLC
Loan Note Certificates,
2.256% due 1/31/99 (cost
$318,331)................ 342,305
--Business & Public
Services
-------------
342,305
-------------
Total Investments--94.4%
(cost--$124,260,883)
(f)...................... 134,337,293
Unrealized Depreciation on
Foreign Currency
Contracts--0.0% (g)...... (238)
Other Assets in Excess of
Liabilities--5.6%........ 7,898,862
-------------
Net Assets--100.0%......... $142,235,917
-------------
-------------
</TABLE>
<TABLE>
<S> <C>
------------------
(a) The warrants enable the holder to subscribe to one 'A' share for every 6
warrants held at a price of FM 92.6 per share until June 28, 1996.
(b) The warrants enable the holder to subscribe to one ordinary share for every
warrant held at DM 304 per share until March 11, 1996.
(c) The warrants enable the holder to subscribe to one ordinary share for every
10 warrants held at DM 1215 per share until June 13, 2000.
(d) The rights enable the holder to five new shares for every 23 rights held
until July 14, 1995.
(e) The warrants enable the holder to subscribe to one ordinary share for every
warrant held at GBP 5.25 per share until January 31, 1996.
(f) The United States Federal income tax basis of the Fund's investments at
June 30, 1995 was $124,611,473 and accordingly, net unrealized appreciation
for United States Federal income tax purposes was $9,725,820 (gross
unrealized appreciation--$18,487,594; gross unrealized
depreciation--$8,761,774).
(g) Foreign Currency contracts as of June 30, 1995 are as follows:
--------------------------------------------------------------------------------
EXPIRATION CURRENCY CURRENCY
DATE PURCHASED VALUE SOLD VALUE
---------------------------------------------------------
U.S. French
July 1995 Dollar $ 13,760 Franc $ 13,875
U.S.
July 1995 Dollar 19,660 Irish Punts 19,783
---------------------------------------------------------
Total Foreign Currency
Contracts........... $ 33,420 $ 33,658
--------- ---------
--------- ---------
---------------------------------------------------------
<FN>
(1) Global Depositary Receipt (GDR).
(2) American Depositary Shares (ADS).
+ Non-income producing security.
* Investment in restricted security with an aggregate value of $487,967. The
investment was acquired on October 22, 1990 for $479,391, and it represents
0.34% of net assets at June 30, 1995.
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
----------------------------------------------------
THE EUROPE FUND, INC.
STATEMENT OF
ASSETS AND LIABILITIES
JUNE 30, 1995 (UNAUDITED)
----------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $124,260,883) (Note 1).......... $134,337,293
Domestic cash............................................... 6,876,792
Foreign cash (Note 1)....................................... 197,209
Withholding tax refund receivable........................... 677,235
Dividends receivable........................................ 387,190
Interest receivable......................................... 83,473
Prepaid expenses and other assets........................... 18,385
-------------
Total assets.......................................... 142,577,577
-------------
LIABILITIES
Investment management fee payable (Note 2).................. 88,187
Administration fee payable (Note 2)......................... 29,396
Unrealized depreciation on foreign currency contracts....... 238
Accrued expenses and other liabilities...................... 223,839
-------------
Total liabilities..................................... 341,660
-------------
NET ASSETS.................................................. $142,235,917
-------------
-------------
Net Assets consist of:
Common Stock, $.001 par value
(Authorized 100,000,000 shares)
(Note 4)................................................. $ 10,066
Paid-in surplus........................................... 129,299,044
Undistributed net investment income....................... 1,468,905
Accumulated net realized capital gains on investments and
foreign currency related transactions.................... 1,329,605
Net unrealized appreciation on investments and foreign
currency related transactions............................ 10,128,297
-------------
Net Assets................................................ $142,235,917
-------------
-------------
Net Asset Value per share
($142,235,917/10,066,319 shares of common stock issued and
outstanding)............................................... $14.13
-------------
-------------
</TABLE>
----------------------------------------------------
THE EUROPE FUND, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED
JUNE 30, 1995 (UNAUDITED)
----------------------------------------------------
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends................................................. $ 2,268,668
Interest.................................................. 249,339
-------------
2,518,007
Less: Withholding tax on foreign source dividends......... 321,957
-------------
Total income.......................................... 2,196,050
-------------
Expenses
Investment management fee (Note 2)........................ 493,235
Administration fee (Note 2)............................... 164,412
Custodian fees............................................ 63,019
Directors' fees and expenses.............................. 61,997
Legal fees................................................ 48,603
Shareholder servicing fees................................ 30,680
Reports to shareholders................................... 26,614
Audit fees................................................ 22,811
Amortization of organization expenses (Note 1)............ 13,420
NYSE listing fee.......................................... 12,030
Miscellaneous............................................. 10,085
-------------
Total expenses........................................ 946,906
-------------
Net investment income....................................... 1,249,144
-------------
</TABLE>
<TABLE>
<S> <C> <C>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Realized gain (loss) from:
Investments -- net........................................ $ 1,170,548
Foreign currency transactions............................. (73,868) 1,096,680
-------------
Change in unrealized appreciation on:
Investments -- net........................................ 13,441,825
Foreign currency related transactions..................... 17,700 13,459,525
------------- -------------
Net realized and unrealized gain on investments and foreign
currency related transactions.............................. 14,556,205
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................
$ 15,805,349
-------------
-------------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
--------------------------------------------------------------------------------
THE EUROPE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE
ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income..................................... $ 1,249,144 $ 1,205,012
Net realized capital gain on investments and foreign
currency related transactions............................ 1,096,680 8,796,070
Change in unrealized appreciation (depreciation) on
investments and foreign currency related transactions.... 13,459,525 (2,164,729)
------------- -------------
Net Increase in Net Assets Resulting from Operations........ 15,805,349 7,836,353
------------- -------------
Dividends and Distributions:
Net investment income ($0.147 per share).................. -- (1,481,591)
Net realized gain on investments and foreign currency
transactions ($0.813 per share) (Note 1)................. -- (8,182,075)
------------- -------------
Net Decrease in Net Assets Resulting from Dividends and
Distributions.............................................. -- (9,663,666)
------------- -------------
Capital Share Transactions:
Additional offering costs from rights issue charged to
capital (Note 4)........................................... -- (14,399)
------------- -------------
Total Increase (Decrease)................................. 15,805,349 (1,841,712)
NET ASSETS
Beginning of period....................................... 126,430,568 128,272,280
------------- -------------
End of period (including undistributed net investment
income of $1,468,905 and $219,761, respectively)......... $142,235,917 $126,430,568
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
--------------------------------------------------------------------------------
THE EUROPE FUND, INC.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share outstanding throughout each period and ratios are as
follows:
<TABLE>
<CAPTION>
FOR THE
PERIOD
FOR THE FROM
SIX MONTHS MAY 3,
ENDED FOR THE YEAR ENDED 1990*
JUNE 30, DECEMBER 31, TO
1995 --------------------------------------------- DECEMBER
(UNAUDITED) 1994 1993 1992 1991 31, 1990
---------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 12.56 $ 12.74 $ 10.74 $ 12.59 $ 13.73 $ 13.90+
---------- --------- --------- --------- --------- ---------
Operations:
Net investment income................. 0.12 0.12 0.12 0.25 0.30 0.75
Net realized and unrealized gain
(loss) on investments and foreign
currency related transactions........ 1.45 0.66 2.63 (1.22) 0.30 (0.92)
---------- --------- --------- --------- --------- ---------
Total from operations............... 1.57 0.78 2.75 (0.97) 0.60 (0.17)
---------- --------- --------- --------- --------- ---------
Dividends and distributions to
shareholders from:
Net investment income................. -- (0.15) (0.07) (0.25) (1.06) --
Net realized gains on investments and
foreign currency related
transactions......................... -- (0.81) (0.68) -- (0.55) --
Paid-in surplus....................... -- -- -- (0.63) (0.13) --
---------- --------- --------- --------- --------- ---------
Total distributions................. -- (0.96) (0.75) (0.88) (1.74) --
---------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 14.13 $ 12.56 $ 12.74 $ 10.74 $ 12.59 $ 13.73
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
Per share market value, end of period... $ 12.50 $ 10.75 $ 13.00 $ 9.88 $ 11.50 $ 11.38
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
Total investment return, market
value**................................ 16.28% (9.92)% 39.40% (7.03)% 16.58% (24.17)%
Net assets at end of period (000
omitted)............................... $142,236 $ 126,293 $ 128,272 $ 89,587 $ 105,072 $114,600
Ratio of operating expenses to average
net assets............................. 1.45%++ 1.42% 1.46% 1.47% 1.56% 1.00%++
Ratio of net investment income to
average net assets..................... 1.91%++ 0.90% 1.17% 1.98% 2.30% 5.50%++
Portfolio turnover rate................. 20% 68% 184% 83% 95% 25%++
<FN>
----------------
* Commencement of operations.
** Total investment return, market value, is based on the change in market price
of a share during the period and assumes reinvestment of distributions at
actual prices pursuant to the Fund's dividend reinvestment plan.
+ Net of offering costs charged to paid-in surplus of $0.20 per share.
++ Annualized.
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
----------------------------------------------
THE EUROPE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------
NOTE 1. ACCOUNTING
POLICIES
The Europe Fund, Inc. (the "Fund") was incorporated in Maryland on February 8,
1990, as a closed-end, diversified management investment company. Prior to the
commencement of operations on May 3, 1990, the Fund had no operations other than
those relating to organizational matters and the sale of 7,092 shares of common
stock on April 23, 1990 to Mercury Asset Management Group plc for $100,000.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
SECURITY VALUATION: All securities for which current market quotations are
readily available are valued at the last sale price prior to the time of
determination, or, if there is no sales price on such date, and if bid and ask
quotations are available, at the mean between the last current bid and asked
prices. Securities that are traded over-the-counter, if bid and asked quotations
are available, are valued at the mean between the current bid and asked prices,
or, if quotations are not available, are valued as determined in good faith by
the Board of Directors of the Fund. Short-term investments having a maturity of
60 days or less are valued at amortized cost. Securities and assets for which
current market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors of the Fund.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Dividend income is recorded on the
ex-dividend date, or as soon as the Fund is informed of the dividend, and
interest income is recorded on an accrual basis.
FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts and transactions are translated into
U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities at
the 10:00 A.M. midpoint rate of exchange on valuation date.
12
<PAGE>
(ii) purchases and sales of investment securities, income and expenses at the
10:00 A.M. midpoint rate of exchange prevailing on the respective dates
of such transactions.
The resultant exchange gains and losses are included in the Statement of
Operations.
Realized foreign exchange gains and losses which result from changes in
foreign exchange rates between the date which the Fund accrues dividends,
interest and foreign withholding taxes, and the date it actually receives the
U.S. dollar equivalent amounts, are included as a component of net realized
gains. Realized foreign exchange gains and losses which result from changes in
foreign exchange rates between the trade and settlement dates on securities and
currency transactions are included as a component of net realized gains. Net
currency gains and losses from valuing other assets and liabilities denominated
in foreign currency at the period end exchange rate are reflected in unrealized
appreciation or depreciation on investments and foreign currency related
transactions.
FOREIGN CURRENCY CONSISTS OF:
<TABLE>
<CAPTION>
UNITS COST VALUE
--------- --------- ---------
<S> <C> <C> <C>
British Pound.............. 5 $ 8 $ 7
Dutch Guilder.............. 3 2 2
Finnish Markka............. 4 1 1
French Franc............... 516,979 106,525 106,627
German Deutschemark........ 71,060 51,599 51,351
Irish Punt................. 12,084 19,573 19,791
Spanish Pesetas............ 2,356,372 18,657 19,426
Swiss Franc................ 4 4 4
--------- ---------
$ 196,369 $ 197,209
--------- ---------
--------- ---------
</TABLE>
The Fund holds foreign currency in order to facilitate the purchases of
foreign securities.
FORWARD CURRENCY EXCHANGE CONTRACTS: The Fund may enter into forward currency
exchange contracts to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. Fluctuations in the
value of forward currency exchange contracts are recorded for book purposes as
unrealized gains or losses by the Fund. If the Fund enters into a closing
transaction, the Fund will realize a gain or loss equal to the difference
between the value of forward currency contracts to sell and the forward currency
contracts to buy.
TAXES: No provision has been made for United States Federal income taxes
because the Fund intends to meet the requirements of the United States Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its taxable income to shareholders.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund records dividends and
distributions to its shareholders on the ex-date. The Fund intends to distribute
to shareholders annually by the end of January an amount equal to at least 7
percent of the Fund's net asset value determined as of the beginning of the
previous calendar year. If, for any calendar year, the aggregate of net
investment income and net realized capital gains (if any) is less than 7 percent
of the Fund's net asset value as of the beginning of that calendar year, the
difference will be distributed from the Fund's paid-in surplus.
DEFERRED ORGANIZATION EXPENSES: Costs incurred by the Fund in connection with
its organization have been deferred and are being amortized on a straight-line
basis over a five year period.
RECLASSIFICATIONS: During the year ended December 31, 1994, net realized losses
on foreign currency related transactions relating to prior years of $170,795
were reclassified from undistributed net investment income to accumulated net
realized gains relating to prior years' net realized losses on foreign currency
related transactions.
NOTE 2. TRANSACTIONS WITH AFFILIATES AND AGREEMENTS
The Fund has entered into Agreements with Mercury Asset Management International
Channel Islands Ltd. (the "Investment Manager"), and Mercury Asset Management
International Ltd. (the "Investment Adviser").
The Investment Management Agreement provides that the Fund will pay the
Investment Manager a fee, computed weekly and payable monthly, at the following
rates: 0.75% of the Fund's average weekly net assets up to $250 million, and
0.65% of such assets in excess of $250 million. The Investment Manager makes
investment decisions on behalf of the Fund on the basis of recommendations from
the Investment Adviser subject to the overall supervision of the Board of
Directors for the Fund. The Investment Manager pays a fee to the Investment
Adviser for services rendered.
13
<PAGE>
The Fund has entered into an Administration Agreement with Princeton
Administrators, L.P. ("Administrator"). The Administration Agreement provides
that the Fund will pay the Administrator a fee at the annual rate of 0.25% of
the Fund's average weekly net assets up to $200 million and 0.20% on such assets
in excess of $200 million. The Administrator performs administrative services
necessary for the operation of the Fund, including maintaining certain books and
records of the Fund and preparing certain reports and documents required by laws
and regulations, and provides the Fund with administrative office facilities.
Certain directors and officers of the Fund are also directors and officers of
either the Investment Manager, the Investment Adviser, and/or Mercury Asset
Management Group plc (the parent company of the Investment Adviser and
Investment Manager or "Mercury").
NOTE 3. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, other than U.S. Government
investments and short-term investments, for the period ended June 30, 1995 were
$25,538,689 and $31,058,188, respectively.
NOTE 4. CAPITAL
There are 100 million shares of $.001 par value common stock authorized. Of the
10,066,319 shares outstanding at June 30, 1995, Mercury owned 8,854 shares in
respect of the Fund's initial seed capital.
NOTE 5. QUARTERLY RESULTS OF OPERATIONS* (UNAUDITED)
<TABLE>
<CAPTION>
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS AND
FOREIGN
NET INVESTMENT CURRENCY
INVESTMENT RELATED
INCOME INCOME TRANSACTIONS
---------------------- -------------------- --------------------
PER PER PER
QUARTER ENDED TOTAL SHARE TOTAL SHARE TOTAL SHARE
-------------------- --------- ----- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
March 31, 1993...... $ 572 $ 0.06 $ 190 $ 0.02 $ 3,441 $ 0.36
June 30, 1993....... 1,156 0.11 835 0.08 165 0.02
September 30,
1993............... 513 0.05 135 0.02 8,742 0.90
December 31, 1993... 421 0.04 24 0.00 13,032 1.35
--------- ----- --------- --------- --------- ---------
Total............... $ 2,662 $ 0.26 $ 1,184 $ 0.12 $ 25,380 $ 2.63
--------- ----- --------- --------- --------- ---------
--------- ----- --------- --------- --------- ---------
March 31, 1994...... $ 398 $ 0.04 $ (48) $ (0.01) $ 2,985 $ 0.30
June 30, 1994....... 1,251 0.12 725 0.08 (3,236) (0.33)
September 30,
1994............... 628 0.06 309 0.03 6,524 0.66
December 31, 1994... 825 0.08 219 0.02 358 0.03
--------- ----- --------- --------- --------- ---------
Total............... $ 3,102 $ 0.30 $ 1,205 $ 0.12 $ 6,631 $ 0.66
--------- ----- --------- --------- --------- ---------
--------- ----- --------- --------- --------- ---------
March 31, 1995...... $ 652 $ 0.07 $ 215 $ 0.02 $ 4,484 $ 0.45
June 30, 1995....... 1,544 0.15 1,034 0.10 10,072 1.00
--------- ----- --------- --------- --------- ---------
Total............... $ 2,196 $ 0.22 $ 1,249 $ 0.12 $ 14,556 $ 1.45
--------- ----- --------- --------- --------- ---------
--------- ----- --------- --------- --------- ---------
</TABLE>
--------------
* Totals expressed in thousands of dollars except per share amounts.
14
<PAGE>
NOTE 6. PER SHARE SELECTED QUARTERLY
FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
NET ASSET VALUE MARKET PRICE*
---------------------- ------------
QUARTER ENDED HIGH LOW HIGH LOW VOLUME**
------------------------- ------ ------ -------- -------- ---------
<S> <C> <C> <C> <C> <C>
March 31, 1993........... $11.17 $10.46 $11- 1/2 $ 9- 7/8 850
June 30, 1993............ 11.58 11.07 11- 5/8 10- 1/4 1,240
September 30, 1993....... 12.45 11.09 14- 1/4 11- 1/8 1,853
December 31, 1993........ 13.23 12.31 13- 5/8 11- 1/2 1,778
March 31, 1994........... 13.78 12.99 14 11- 1/8 1,985
June 30, 1994............ 13.40 12.72 12- 3/4 10- 7/8 930
September 30, 1994....... 13.91 12.69 12- 5/8 11 2,300
December 31, 1994........ 14.13 12.18 12- 1/8 10- 1/2 1,784
March 31, 1995........... 13.03 12.43 12 10- 5/8 1,987
June 30, 1995............ 14.13 13.03 12- 3/4 11- 3/8 1,817
</TABLE>
--------------
* As reported on the New York Stock Exchange.
** In thousands.
PROXY RESULTS
During the six-month period ended June 30, 1995, The Europe Fund, Inc.
shareholders voted on the following proposals. The proposals were approved at
the annual meeting of shareholders on June 7, 1995. The description of the
proposals and number of shares voted are as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
SHARES VOTED
SHARES VOTED WITHOUT
FOR AUTHORITY
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To elect the Fund's Board of Directors: George F. Bennett 8,166,992 280,370
Sir Arthur Bryan 8,168,641 278,721
Peter Stormonth Darling 8,160,952 286,410
Leon Levy 8,171,971 275,391
J. Murray Logan 8,177,842 269,520
James S. Martin 8,152,802 294,560
Francois-Xavier Ortoli 8,155,072 292,290
Anthony M. Solomon 8,168,770 278,592
----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VOTED SHARES VOTED SHARES VOTED
FOR AGAINST ABSTAIN
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. To select Ernst & Young LLP
as the Fund's independent auditors. 8,170,062 169,840 107,460
-----------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
-------------------------------------------------------------
DIRECTORS AND OFFICERS
ANTHONY M. SOLOMON, Chairman of the Board and
Director
RICHARD J. OLDFIELD, President
GEORGE F. BENNETT, Director
* SIR ARTHUR BRYAN, Director
PETER STORMONTH DARLING, Director
LEON N. LEVY, Director
* J. MURRAY LOGAN, Director
* JAMES S. MARTIN, Director
FRANCOIS-XAVIER ORTOLI, Director
STEVEN W. GOLANN, Vice President and Secretary
JAMES M. DONALD, Vice President, Treasurer and
Assistant Secretary
THADDEA M. FELDMAN, Assistant Secretary
* Member of the Audit Committee
The accompanying financials as of June 30, 1995 were not audited and
accordingly, no opinion is expressed on them.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its Common Stock in the open market.
------------------------------------------------
EXECUTIVE OFFICES--
780 Third Avenue
New York, New York 10017
(For latest net asset value and requests for Fund
Reports, please call 1 (800) 543-6217 or (609)
282-4600.)
INVESTMENT MANAGER--
Mercury Asset Management International Channel Islands
Limited
Forum House
Grenville Street
St. Helier, Jersey
Channel Islands
INVESTMENT ADVISER--
Mercury Asset Management International Ltd.
33 King William Street
London EC4R 9AS
England
ADMINISTRATOR--
Princeton Administrators, L.P.
P.O. Box 9011
Princeton, New Jersey 08543
CUSTODIAN--
Morgan Guaranty Trust Co.
60 Victoria Embankment
London EC4Y OJP
England
TRANSFER AGENT AND REGISTRAR--
The Bank of New York
101 Barclay Street
New York, New York 10286
LEGAL COUNSEL--
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
INDEPENDENT AUDITORS--
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
This report is for shareholder
information. This is not a
prospectus intended for use in the
purchase or sale of Fund shares.
<PAGE>
------------------------------------------------
SUMMARY OF GENERAL INFORMATION
-------------------------------------------
THE FUND
The Europe Fund, Inc. (the "Fund") is a closed-end investment company whose
shares trade on the New York Stock Exchange. The Fund seeks long-term capital
appreciation through investment primarily in European equity securities. The
Fund is managed by Mercury Asset Management International (Jersey) Limited,
relying on investment advice from Mercury Asset Management International Ltd.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transactions section of newspapers under the designation
"Europe Fd." The Fund's New York Stock Exchange trading symbol is EF. Weekly
comparative net asset value (NAV) and market price information about the Fund's
shares are published each Monday in THE WALL STREET JOURNAL and THE NEW YORK
TIMES and other newspapers in a table called "Closed End Funds."
Shareholders interested in receiving the quarterly newsletter entitled "Closed
End Fund Focus" should call 1-800-543-6217 or 1-212-888-6941 and request to be
placed on the mailing list or send a request by mail to the Fund's address.
DIVIDEND REINVESTMENT PLAN-SUMMARY
An automatic Dividend Reinvestment Plan is available to provide shareholders
with automatic reinvestment of their dividend income and capital gains
distributions in additional shares of the Fund's common stock. A brochure
describing the Plan is available from the Plan Agent, The Bank of New York, by
calling (800) 524-4458.
If you wish to participate and your shares are held in your own name, no
action is required on your part. However, if your shares are held in the name of
a brokerage firm, bank or other nominee, you should instruct your nominee to
participate in the Plan on your behalf. If your nominee is unable to participate
on your behalf, you should request it to register your shares in your own name
which will enable you to participate in the Plan.
TRANSFER AGENT:
The Bank of New York
Telephone Inquiries: 1-800-432-8224
Address Shareholder Inquiries To:
Shareholder Relations Department - 11 E
P.O. Box 11258
Church Street Station
New York, NY 10286
Send Certificates for Transfer and Address Changes to:
Receive and Deliver Department - 11 W
P.O. Box 11002
Church Street Station
New York, NY 10286
[LOGO]
THE EUROPE FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 1995
