The board of directors of Scudder New Europe Fund, Inc. (NEF) announced today its formal approval of a proposal to convert the Fund from a closed-end investment company to an open-end investment company (mutual fund). Shareholders will be asked to consider and approve this proposal at the annual shareholder's meeting scheduled for July 20, 1999.

Scudder Kemper Investments believes that significant developments in the European markets in recent years would permit Scudder New Europe to now operate efficiently as an open-end fund. The current portfolio management team of Scudder New Europe Fund would remain in place to manage the fund.

Additionally, the Scudder New Europe Board yesterday approved the acquisition of the assets of Kemper Europe Fund. The board of trustees of Kemper Europe approved the acquisition on March 31, 1999, and also scheduled a shareholder meeting for July 20, 1999, to obtain necessary shareholder approvals.

The conversion of Scudder New Europe to a mutual fund is not contingent on the approval by shareholders of the acquisition of Kemper Europe. If the open-ending proposal is approved by shareholders of Scudder New Europe, the Fund will commence delisting procedures with the NYSE and subsequently begin operating as a mutual fund distributed as part of the Kemper family of funds. These transactions are expected to be concluded on or about September 1, 1999.

If open-ending is approved by the shareholders of Scudder New Europe, the Board of Directors has determined that all shares acquired when Scudder New Europe operated in closed-end form would be redeemable at net asset value. Redemptions during thefirst year after conversion to open-end status will be subject to a 2% redemption fee paid to the Fund.  

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