<PAGE>
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to present to you the First Quarter Report of The Europe Fund,
Inc. On March 31, 1996, the end of the period under review, the Fund had net
assets of $159.8 million. This represents a net asset value per share of $15.88,
a rise of 74.45% from its initial value after taking into account underwriting
discounts, commissions, offering expenses and distributions. This compares with
a 77.98% 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 $13.125 per
share on the New York Stock Exchange, which represents a 17.35% discount to the
Fund's net asset value per share.
On January 23, 1996, a Special Meeting of Stockholders of the Fund was held to
consider whether to convert the Fund from a closed-end investment company to an
open-end investment company. A sufficient number of shares were not present at
that meeting to achieve a quorum. The Board of Directors of the Fund decided to
adjourn the meeting until February 27, 1996 and to do an additional mailing to
shareholders on the question of open-ending. On February 27, 1996, a quorum was
again not achieved and the proposal consequently failed. The votes were as
follows: 20.12% for the proposal to open-end, 20.88% against the proposal to
open-end and 1.66% abstentions.
We also enclose an investment review and European market outlook together with
a summary of the major portfolio investments.
Yours sincerely,
<TABLE>
<S> <C>
(SIGNATURE)
</TABLE>
Anthony M. Solomon
Chairman of the Board
<PAGE>
Investment Review
During the first quarter of 1996, your Fund experienced a rise in net asset
value of 10.89%, which compared with an increase of 3.71% in the value of the
MSCI Europe Index. These results are recorded in total return and dollar-based
terms.
The economic environment in Europe remained poor, following a sharp
deterioration in the final quarter of 1995, which saw negative GDP growth in
five major economies. This slowdown has fed through to recent unemployment data,
which showed sharp rises, particularly in Germany. There is, however, some
evidence pointing to a stabilization of conditions during the quarter, but
little reason to expect a rapid return to positive growth. The economic
slowdown, and particularly the accompanying rise in unemployment, prompted
government authorities to ease monetary policy further. It was this background
of easing monetary policy that promoted the strength of equity markets. The bond
markets, however, were unsettled by the increased willingness of governments to
take steps to stimulate activities. Within the markets, there was marked
underperformance in the financial and defensive sectors. The bank sector
suffered from poor results caused by bad loan provisions remaining higher than
expected and lending margins coming under pressure, while the performance of the
insurance and utility sectors was undermined by less favorable bond markets.
Most other sectors performed well, with cyclical shares being boosted by the
steps being taken to stimulate economic activity and companies with
better-than-expected growth being rewarded for reliability of their earnings in
a difficult environment. While the main markets all contributed similarly to the
overall index return, the peripheral markets were mostly weaker, particularly
Italy, which suffered from a high level of political uncertainty surrounding the
elections.
The performance (in U.S. dollars) of MSCI Indices for several European markets
is listed below:
<TABLE>
<CAPTION>
MSCI Markets (Rates of Return to March 31, 1996)
- ------------------------------------------------------------------------------------------------------------------------------
Country 12 Months 3 Months 1 Month
- --------------------------------------------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Austria................................................................................ -2.1 4.5 -0.8
Belgium................................................................................ 14.1 -1.3 -2.4
Denmark................................................................................ 16.9 2.1 -2.5
Finland................................................................................ 5.0 -2.9 0.3
France................................................................................. 10.1 8.4 3.0
Germany................................................................................ 17.4 4.8 -0.4
Italy.................................................................................. 9.7 -0.6 -3.9
Netherlands............................................................................ 23.7 5.8 2.9
Norway................................................................................. 14.2 3.2 1.9
Spain.................................................................................. 38.4 6.0 -1.4
Sweden................................................................................. 45.2 9.6 2.3
Switzerland............................................................................ 37.6 6.7 8.8
United Kingdom......................................................................... 14.0 0.1 -0.5
</TABLE>
2
<PAGE>
Economic and Market Outlook
In response to the recent lowering of interest rates, we would expect to see
the economy stabilize to improve to a reasonable level of growth in the second
half of the year. Last quarter, it was predicted by many commentators that
European equities as a whole would not enjoy the same degree of support from
falling bond yields as was seen during 1995. So far, this has been the case, but
equities have performed well nonetheless. We remain of the view that bond
markets are unlikely to provide much support and thus, following a good start to
the year, equities will need rising profit expectations to make further
progress. We believe that the Fund, with its focus on stock selection, should be
well placed to benefit from the current environment.
Portfolio Summary
During the three-month period to March 31, 1996, the Fund purchased new
holdings in Veba, Autoliv and Canal. Holdings in Irish Continental, British
Biotechnology, Polynorm and Draka Holdings were reduced.
The Fund's and the MSCI Europe Index's country weightings expressed as a
percentage of market value of total equities held at March 31, 1996 are outlined
below:
<TABLE>
<CAPTION>
MSCI
Fund Europe Index
--------- -------------
<S> <C> <C>
Austria.......................... 0.0% 0.9%
Belgium.......................... 0.0 2.2
Czech Republic................... 0.7 0.0
Denmark.......................... 0.0 1.6
Finland.......................... 2.8 1.0
France........................... 19.1 13.2
Germany.......................... 13.7 14.0
Hungary.......................... 0.2 0.0
Ireland.......................... 0.0 0.7
Italy............................ 1.7 4.3
<CAPTION>
MSCI
Fund Europe Index
--------- -------------
<S> <C> <C>
Luxembourg....................... 0.8% 0.0%
Netherlands...................... 8.1 8.2
Norway........................... 2.3 0.9
Spain............................ 3.4 3.7
Sweden........................... 11.9 4.3
Switzerland...................... 6.4 12.4
Turkey........................... 0.2 0.0
United Kingdom................... 28.7 32.6
--------- ------
100.0% 100.0%
--------- ------
--------- ------
</TABLE>
The Fund's ten largest equity holdings at March 31, 1996 were:
BAYER AG
Bayer is one of the world's most diversified companies with business in
chemicals, healthcare and imaging technology. The company reported half year
results ahead of market expectations. Stronger volume and pricing were the
driving force behind the progress. The recent interest rate cuts in the U.S.,
Germany and other continental European countries heighten the prospect that the
interest rate cycle may be peaking, which has helped to renew interest in the
chemicals sector as a whole, and Bayer in particular.
BRITISH BIOTECHNOLOGY GROUP PLC
The company is one of the leading biotechnology companies in the U.K., with
several products showing promise in clinical trials. The leading development
candidate is Batimastat, the anti-cancer drug. Although the company is not
expected to report any significant profits before 1997, it is active in several
areas which could produce blockbuster drugs. In our opinion, the company is
relatively attractively valued and there appears to be a chance of further
progress over the next year.
3
<PAGE>
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 expected to double by the year 2000 with discoveries in the Far East
and Latin America. In view of the earnings outlook, we believe that the stock is
attractively valued, relative to its European peer group.
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.
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, in our opinion, is well placed to benefit from a recovery in infrastructure
expenditure both in Europe and in lesser developed countries.
SECURITAS AB
The group is a pure service company operating in the guard, alarm and cash-in
transit services markets. In our opinion, it is a high quality growth company,
offering good earnings visibility and a proven track record in acquisitions.
Unlike certain other growth companies in the business services sector,
Securitas' acquisitions have benefited shareholders generating average per annum
profit growth of more than 25% over the past 5 years.
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. We believe that the
company is a well managed and rationalized provider of acute hospital services.
We expect that its expanding range of services and geographical locations should
provide solid earnings growth in the foreseeable future.
4
<PAGE>
GKN PLC
GKN operates in the automotive components and defense engineering markets.
Recent interim results were well above expectations, driven mainly by the
automotive division. Orders for the second half remain strong. Demand rose
strongly in continental Europe and Britain. We believe that the company remains
financially sound and is one of the leading organizations in the sector.
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. 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.
HAYS PLC
The group operates in the business services and distribution market. It has a
strong position in its domestic markets and enticing expansion opportunities
abroad. A string of successful acquisitions has trebled the company's market
value over the last six years. We believe recent results have confirmed that
above average growth may be expected in the medium term.
5
<PAGE>
- -----------------------------------------------
The Europe Fund, Inc.
Schedule of Investments
as of March 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
Shares Description Value
- ----------------------------------------------------------------------------
<C> <S> <C>
Common Stocks & Warrants -- 89.0%
CZECH REPUBLIC--0.7%
50,000 +Central European Media Enterprises........ $ 1,075,000
--Consumer Goods
-------------
1,075,000
-------------
FINLAND--0.5%
50,000 Outokumpu Oy............................... 846,834
--Metals--Non Ferrous
-------------
846,834
-------------
FRANCE--17.7%
10,000 +Axime..................................... 1,274,469
--Electrical & Electronics
23,000 BIC........................................ 2,541,968
--Recreation & Other Consumer Goods
67,500 But SA..................................... 4,207,241
--Services
8,500 Canal Plus................................. 1,993,946
--Services
23,000 Cie Generale des Eaux...................... 2,358,763
--Business & Public Services
30,000 Cipe France................................ 2,455,344
--Business & Public Services
12,000 Ecco Travail Temporaire.................... 1,063,385
--Business & Public Services
20,000 Elf Aquitaine.............................. 1,360,097
--Energy Sources
8,000 Pinault Printemps Redoute.................. 2,214,390
--Merchandising
3,000 Societe Eurafrance......................... 1,192,425
--Financial Services
4,000 Societe Eurafrance (Rights)................ 73,680
--Financial Services
30,000 Television Francaise....................... 3,076,647
--Broadcasting & Publishing
<CAPTION>
- ----------------------------------------------------------------------------
Shares Description Value
- ----------------------------------------------------------------------------
<C> <S> <C>
66,000 Total SA Class B........................... $ 4,468,606
--Energy Sources
-------------
28,280,961
-------------
GERMANY--8.8%
11,440 +AGAB AG................................... 1,165,430
--Financial Services
1,320 +AGAB AG (Warrants)(a)..................... 2,688
--Financial Services
20,000 Bayer AG................................... 6,826,388
--Chemicals
16,000 HeidelBerger Zement (Warrants)(b).......... 116,737
--Building Materials & Components
13,700 Hornbach Baumarkt AG....................... 461,192
--Consumer Goods
7,900 +Kiekert AG................................ 375,322
--Automobiles
23,200 Leifheit AG................................ 963,649
--Appliances & Household Durables
1,260 Marschollek Lautenschlager Partners
(Ordinary)............................... 1,133,949
--Financial Services
18,550 +Praktiker Bau Und Heimwerkermarkt......... 440,647
--Appliances & Household Durables
52,000 Veba AG.................................... 2,532,238
--Energy
-------------
14,018,240
-------------
HUNGARY--0.2%
6,982 Primagaz Hungaria.......................... 249,688
--Utilities--Electric & Gas
-------------
249,688
-------------
ITALY--1.6%
15,500 +Gucci Group NV............................ 744,000
--Consumer Goods
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
Shares Description Value
- ----------------------------------------------------------------------------
<C> <S> <C>
34,500 Industrie Natuzzi SPA (ADR) (1)............ $ 1,875,938
--Appliances & Household Durables
-------------
2,619,938
-------------
LUXEMBOURG--0.8%
12,000 Safra Republic Holding..................... 1,308,000
--Banking
-------------
1,308,000
-------------
NETHERLANDS--7.8%
17 +A.B. Capital Fund*........................ 455,799
--Business & Public Services
6,816 Aalberts Industries........................ 540,205
--Capital Equipment
67,000 ABN Amro Holding N.V....................... 3,339,640
--Finance
150,000 Elsevier................................... 2,301,255
--Broadcasting & Publishing
29,000 Nutricia Ver Bedrj......................... 2,910,375
--Food & Household Products
180,000 Ver Ned Uitgevers Bezit.................... 3,001,637
--Broadcasting & Publishing
-------------
12,548,911
-------------
NORWAY--2.1%
810,000 Christiania Bank OG Kreditkasse............ 1,886,135
--Banking
39,500 +Fokus Bank A/S............................ 221,457
--Finance
100,000 Schibsted A/S.............................. 1,375,258
--Broadcasting & Publishing
-------------
3,482,850
-------------
SPAIN--3.3%
7,100 Acerinox................................... 802,584
--Materials
41,037 Estacion Subterraneos...................... 606,360
--Services
109,332 Europistas Concesionaria Espanola SA....... 878,364
--Business & Public Services
12,700 Gas Natural SDG............................ 2,200,581
--Utilities--Gas
<CAPTION>
- ----------------------------------------------------------------------------
Shares Description Value
- ----------------------------------------------------------------------------
<C> <S> <C>
350,000 +Sotogrande................................ $ 746,064
--Finance
-------------
5,233,953
-------------
SWEDEN--11.5%
40,000 Asea AB.................................... 4,121,612
--Utilities--Electric
45,000 Autoliv AB................................. 2,298,188
--Electronic Components
100,000 Avesta Sheffield........................... 1,010,933
--Metals--Steel
18,000 Elekta AB (B Free)......................... 601,168
--Electrical & Electronics
21,700 Hennes & Mauritz........................... 1,543,732
--Merchandising
70,000 Hoganas AB (Series B)...................... 2,133,443
--Machinery & Engineering
62,500 Securitas AB (Series B).................... 3,725,476
--Health & Personal Care
60,000 Svedala Industrie.......................... 1,958,964
--Machinery & Engineering
80,000 Svenska Stal AB (Series B)................. 940,542
--Metals--Non Ferrous
-------------
18,334,058
-------------
SWITZERLAND--6.2%
3,240 Adia SA (Bearer)........................... 693,077
--Business & Public Services
700 Baloise Holding Ltd. (Registered).......... 1,520,970
--Insurance
560 Bobst AG (Bearer).......................... 924,373
--Machinery & Engineering
2,000 Ciba Geigy AG.............................. 2,484,420
--Chemicals
7,000 Fust AG.................................... 2,033,855
--Appliances & Household Products
1,900 Hilti AG (Participating Certificates)...... 1,472,124
--Industrial Components
1,330 Phoenix Mecano............................. 750,463
--Capital Equipment
-------------
9,879,282
-------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
Shares Description Value
- ----------------------------------------------------------------------------
<C> <S> <C>
TURKEY--0.2%
483,000 Erciyas Biracilik Ve Malt Sanayii.......... $ 293,140
--Beverages & Tobacco
-------------
293,140
-------------
UNITED KINGDOM--27.6%
100,000 Amersham International PLC (Ordinary)...... 1,388,134
--Health & Personal Care
200,000 Bemrose Corp. PLC (Ordinary)............... 1,160,596
--Forest Products & Paper Materials
415,809 Birkby PLC (Ordinary)...................... 984,222
--Real Estate
250,000 British Airport Authority PLC (Ordinary)... 2,042,496
--Business & Public Services
151,500 +British Biotechnology Group PLC
(Ordinary)............................... 5,783,891
--Health & Personal Care
250,000 Cable & Wireless PLC (Ordinary)............ 2,034,861
--Telecommunications
80,000 Cadbury Schweppes PLC (Ordinary)........... 612,062
--Food & Household Products
50,000 Domestic & General Group (Ordinary)........ 1,282,764
--Insurance
250,000 GKN PLC (Ordinary)......................... 3,630,680
--Machinery & Engineering
250,000 Great Universal Store PLC.................. 2,569,346
--Merchandising
666,666 Halma PLC (Ordinary)....................... 1,852,880
--Machinery & Engineering
550,000 Hays PLC (Ordinary)........................ 3,410,014
--Business & Public Services
318,000 Hewden-Stuart Plant PLC (Ordinary)......... 752,708
--Construction & Housing
<CAPTION>
- ----------------------------------------------------------------------------
Shares Description Value
- ----------------------------------------------------------------------------
<C> <S> <C>
160,000 Jarvis Porter Group PLC.................... $ 740,338
--Forest Products & Paper Materials
400,000 Mai PLC (Ordinary)......................... 2,394,493
--Financial Services
200,000 Marks & Spencer PLC (Ordinary)............. 1,282,764
--Merchandising
150,000 Pearson PLC (Ordinary)..................... 1,532,445
--Broadcasting & Publishing
100,000 Reuters Holdings PLC (Ordinary)............ 1,085,768
--Business & Public Services
300,000 Royal Bank of Scotland PLC (Ordinary)...... 2,235,674
--Banking
195,000 Serco Group PLC (Ordinary)................. 1,474,033
--Business & Public Services
100,000 Standard Chartered PLC (Ordinary).......... 926,950
--Banking
50,000 Thorn EMI PLC (Ordinary)................... 1,288,109
--Appliances & Household Durables
60,000 Unilever PLC (Ordinary).................... 1,117,837
--Food & Household Products
1,000,000 Waterford Wedgwood PLC (Units)............. 1,000,480
--Food & Household Products
220,000 Wolseley PLC (Ordinary).................... 1,474,873
--Building Materials & Components
-------------
44,058,418
-------------
Total Common Stocks & Warrants
(cost--$118,601,518)..................... 142,229,273
-------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
Shares/Face
Amount Description Value
- ----------------------------------------------------------------------------
<C> <S> <C>
Preferred Stocks -- 6.0%
FINLAND--1.5%
70,000 Nokia AB (Oy).............................. $ 2,451,385
--Electrical & Electronics
-------------
2,451,385
-------------
GERMANY--4.5%
6,000 Fresenius.................................. 1,064,884
--Health & Personal Care
2,590 Marschollek Lautenschlager Partners
(Non-Voting)............................. 2,355,504
--Financial Services
35,412 Rhoen Klinikum (Non-Voting)................ 3,713,285
--Health & Personal Care
-------------
7,133,673
-------------
Total Preferred Stocks
(cost--$6,587,731)....................... 9,585,058
-------------
Convertible Bonds -- 1.4%
FINLAND--0.7%
FIM 4,550,000 Lansivoima, 7.425% due 3/29/2001........... 1,082,607
--Utilities--Electric & Gas
-------------
1,082,607
-------------
<CAPTION>
- ----------------------------------------------------------------------------
Face
Amount Description Value
- ----------------------------------------------------------------------------
<C> <S> <C>
FRANCE--0.7%
FF 5,331,730 Virbac, 5% due 12/31/2001.................. $ 1,198,676
--Health & Personal Care
-------------
1,198,676
-------------
Total Convertible Bonds
(cost--$1,897,753)....................... 2,281,283
-------------
Other Investment -- 0.2%
UNITED KINGDOM--0.2%
L 215,016 Carlton Communications PLC Loan Note
Certificates, 2.256% due 1/31/99
(cost--$318,331)......................... 328,351
--Business & Public Services
-------------
328,351
-------------
Total Investments--96.6%
(cost--$127,405,333)..................... 154,423,965
Other Assets in Excess of
Liabilities--3.4%........................ 5,393,037
-------------
Net Assets--100.0%......................... $ 159,817,002
-------------
-------------
</TABLE>
- ------------------------------
(a) The warrants enable the holder to subscribe to one ordinary share for
every warrant held at DM 304 per share until November 30, 1997.
(b) The warrants enable the holder to subscribe to eleven ordinary shares
for every 100 warrants held at DM 1215 per share until June 13, 2000.
(1) American Depositary Receipt (ADR).
+ Non-income producing security.
* Investment in restricted security with an aggregate value of $455,799,
respresenting 0.29% of net assets at March 31, 1996. The investment was
acquired on October 22, 1990 and September 5, 1991 for $759,153.
9
<PAGE>
-------------------------------------------------------------
DIRECTORS AND OFFICERS
ANTHONY M. SOLOMON, Chairman of the Board and
Director
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
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.
This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of Fund shares.
------------------------------------------------
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
Ltd.
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--
The Bank of New York
Avenue des Arts 35
1040 Brussels
Belgium
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
<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 Channel Islands Ltd.,
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.
DISTRIBUTION REINVESTMENT PLAN-SUMMARY
An automatic Distribution Reinvestment Plan (the "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.
Quarterly Report
March 31, 1996
