SCHEDULE 14A

                                 (RULE 14a-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION

           Proxy Statement Pursuant to Section 14(a) of the Securities
                              Exchange Act of 1934

Filed by the Registrant [X]

Filed by a party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement.

[X] Definitive proxy statement.

[ ] Definitive additional materials.

[ ] Soliciting material under Rule 14a-12.

[ ] Confidential,  for  use  of  the  Commission  only  (as  permitted  by  Rule
   14a-6(e)(2)).

                         THE EUROPEAN EQUITY FUND, INC.
--------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of filing fee (check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed pursuant to
   Exchange  Act Rule 0-11  (set  forth the  amount on which the  filing  fee is
   calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange  Act Rule
0-11(a)(2)  and  identify  the  filing  for  which the  offsetting  fee was paid
previously.  Identify the previous filing by registration  statement  number, or
the form or schedule and the date of its filing.

(1)   Amount Previously Paid:

(2)   Form, Schedule or Registration Statement No.:

(3)   Filing Party:

(4)   Date Filed:




                         THE EUROPEAN EQUITY FUND, INC.
                                 345 Park Avenue
                            New York, New York 10154

                                   ----------

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                                  JUNE 20, 2006

                                   ----------

To our Stockholders:

      Notice is hereby  given  that the  Annual  Meeting  of  Stockholders  (the
"Meeting") of The European Equity Fund, Inc.  (formerly The Germany Fund, Inc.),
a Maryland  corporation (the "Fund"),  will be held at 2:00 p.m., New York time,
on June 20, 2006 at the offices of Deutsche Bank, 345 Park Avenue, New York, New
York 10154 for the following purposes:

      1.    To elect four (4)  Directors,  each to serve until the expiration of
            the  applicable  term and until  their  successors  are  elected and
            qualify.

      2.    To ratify the  appointment  by the Audit  Committee and the Board of
            Directors of  PricewaterhouseCoopers  LLP, an independent registered
            public accounting firm, as independent  auditors for the fiscal year
            ending December 31, 2006.

      3.    To  transact  such other  business as may  properly  come before the
            Meeting or any postponement or adjournment thereof.

      Only holders of record of Common Stock at the close of business on May 11,
2006 are entitled to notice of, and to vote at, this Meeting or any postponement
or adjournment thereof.

      If you have any questions or need additional  information,  please contact
Georgeson Shareholder  Communications,  Inc., the Fund's proxy solicitors, at 17
State Street, New York, New York 10004, or by telephone at 1-866-767-8984.

                                              By Order of the Board of Directors

                                              John Millette
                                              Secretary

Dated: May 17, 2006

      WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,  PLEASE SIGN THE ENCLOSED
PROXY  CARD AND  PROMPTLY  RETURN IT TO THE  FUND.  WE ASK YOUR  COOPERATION  IN
MAILING  IN YOUR  PROXY  CARD  PROMPTLY,  SO THAT THE FUND CAN AVOID  ADDITIONAL
EXPENSES OF SOLICITATION OF PROXIES.




                         THE EUROPEAN EQUITY FUND, INC.
                                 345 Park Avenue
                            New York, New York 10154

                         ANNUAL MEETING OF STOCKHOLDERS
                                  June 20, 2006

                                   ----------

                                PROXY STATEMENT

                                   ----------

      This  Proxy  Statement  is  furnished  by the  Board of  Directors  of The
European  Equity Fund,  Inc.  (formerly The Germany  Fund,  Inc.) (the "Board of
Directors" or "Board"),  a Maryland corporation (the "Fund"), in connection with
the  solicitation of proxies for use at the Annual Meeting of Stockholders  (the
"Meeting")  to be held at 2:00  p.m.,  New York  time,  on June 20,  2006 at the
offices of Deutsche Bank, 345 Park Avenue, New York, New York 10154. The purpose
of  the  Meeting  and  the  matters  to be  considered  are  set  forth  in  the
accompanying Notice of Annual Meeting of Stockholders.

      If the accompanying  Proxy Card is executed properly and returned,  shares
represented  by it  will be  voted  at the  Meeting,  and  any  postponement  or
adjournment  thereof,  in accordance  with the  instructions  on the Proxy Card.
However, if no instructions are specified, shares will be voted FOR the election
of four (4) directors of the Fund ("Directors") nominated by the Board (Proposal
1) and FOR the  ratification  of the  appointment by the Audit Committee and the
Board of  PricewaterhouseCoopers  LLP, an independent public accounting firm, as
independent  auditors for the Fund  (Proposal  2). A proxy may be revoked at any
time prior to the time it is voted by  written  notice to the  Secretary  of the
Fund, by submitting a subsequently  executed and dated proxy or by attending the
Meeting and voting in person.

      If a stockholder  owns shares of the Fund in violation of applicable  law,
including  the  Investment  Company  Act of 1940,  as amended  (the  "Investment
Company Act"), the Fund may determine that any vote  attributable to such shares
shall not be  counted,  or that  such  shares  will not be  counted  for  quorum
purposes,  or both.  Under Section  12(d)(1) of the Investment  Company Act, the
acquisition  of more than 3% of the Fund's common stock by another fund (whether
registered,  private or offshore) is unlawful.  There is legal uncertainty about
the  operation of Section  12(d)(1) and about the Fund's right under federal and
state law to  invalidate  votes cast by any person whose Fund shares are held in
violation  of law.  The  Fund  is  prepared,  if  necessary,  to  seek  judicial
resolution of the uncertainty in any particular case.

      The close of  business  on May 11,  2006 has been fixed as the record date
for the determination of stockholders entitled to notice of, and to vote at, the
Meeting.  On  that  date,  the  Fund  had  11,831,994  shares  of  Common  Stock
outstanding  and  entitled  to vote.  Each share will be entitled to one vote on
each matter that comes  before the  Meeting.  It is expected  that the Notice of
Annual  Meeting,  this Proxy  Statement and the form of Proxy Card will first be
mailed to stockholders on or about May 17, 2006.

      A quorum is necessary to hold a valid meeting. If stockholders entitled to
cast  one-third  of all votes  entitled to be cast at the Meeting are present in
person or by proxy,  a quorum  will be  established.  The Fund  intends to treat
properly  executed  proxies  that are  marked  "abstain"  and  broker  non-votes
(defined below) as present for the purposes of determining  whether a quorum has
been achieved at the Meeting.  Under Maryland law, abstentions do not constitute
a vote "for" or "against" a matter and will be disregarded  in  determining  the
"votes cast" on an issue.


                                       1


A "broker  non-vote"  occurs when a broker holding shares for a beneficial owner
does  not  vote  on a  particular  matter  because  the  broker  does  not  have
discretionary  voting  power with  respect to that  matter and has not  received
instructions from the beneficial owner.

                        PROPOSAL 1: ELECTION OF DIRECTORS

      The Fund's charter (the "Charter") provides that the Board of Directors be
divided into three classes of Directors serving  staggered  three-year terms and
until their successors are elected and qualify. The term of office for Directors
in Class I expires at the 2006 Annual  Meeting,  Class II at the next succeeding
annual meeting and Class III at the following  succeeding annual meeting.  Three
Class I nominees,  Mr. Detlef Bierbaum, Mr. John H. Cannon and Dr. Frank Tromel,
are proposed in this proxy statement for election. In addition, Dr. Kurt W. Bock
has been  proposed  for election as a Class III  Director.  Dr. Bock served as a
Director  in Class I until April 25,  2006,  at which time he was elected by the
Board of Directors to Class III in order to rebalance the number of directors in
each Class following the resignation of Mr. Fred H. Langhammer.  Dr. Bock's term
as a Class I director  would have  expired  in 2006.  Each of the three  Class I
nominees  will serve a  three-year  term of office  until the Annual  Meeting of
Stockholders  in 2009 and until his  successor  is  elected  and  qualifies.  If
elected by  stockholders  at the 2006 Annual  Meeting,  Dr. Bock will serve as a
Class III director  until the Annual Meeting of  Stockholders  in 2008 and until
his successor is elected and qualifies.

      Should  any  vacancy  occur  on the  Board  of  Directors,  the  remaining
Directors  would  be able to fill  that  vacancy  by the  affirmative  vote of a
majority of the remaining  Directors in office,  even if the remaining Directors
do not constitute a quorum.  Any Director elected by the Board to fill a vacancy
would hold office until the remainder of the full term of the class of Directors
in which the vacancy occurred and until a successor is elected and qualifies. If
the size of the Board is increased,  additional  Directors  will be  apportioned
among the three classes to make all classes as nearly equal as possible.

      Unless authority is withheld,  it is the intention of the persons named in
the accompanying  form of Proxy Card to vote each Proxy Card for the election of
our four nominees  listed  above.  Each of our nominees is currently a member of
the Board of  Directors.  Each nominee has  indicated  that he will  continue to
serve as a Director  if elected,  but if any nominee  should be unable to serve,
proxies will be voted for any other person  determined  by the persons  named in
the form of  Proxy  Card in  accordance  with  their  discretion.  The  Board of
Directors has no reason to believe that any of the above nominees will be unable
to continue to serve as a Director.

INFORMATION REGARDING DIRECTORS AND OFFICERS

      The  following  tables show  certain  information  about the  nominees for
election as Directors and about Directors  whose terms will continue,  including
beneficial  ownership of Common Stock of the Fund, and all officers of the Fund.
All Directors  resident in the United States own Fund shares.  Directors who are
German  residents  would be subject to adverse German tax  consequences  if they
owned shares of a fund organized  outside of Germany,  such as the Fund, that is
not subject to German regulation or tax reporting. Each Director has served as a
Director of the Fund since the Fund's  inception in 1986,  except for Ambassador
Burt, who was elected to the Board on June 30, 2000, Mr. Cannon, who was elected
to the Board on April 23, 2004, Dr. Bock, who was elected to the Board on May 5,
2004 and Dr. Tromel, who was elected to the Board on July 17, 2005.


                                       2


NOMINEES PROPOSED FOR ELECTION:
--------------------------------------------------------------------------------
                                CLASS I DIRECTORS
         (TERM WILL EXPIRE IN 2006; NOMINEES FOR TERM EXPIRING IN 2009)
--------------------------------------------------------------------------------



                                                                                   NUMBER OF                               SHARES
                                                                                PORTFOLIOS IN           OTHER            OF COMMON
                                                                               FUND COMPLEX(2)      DIRECTORSHIPS          STOCK
                                                          PRINCIPAL              OVERSEEN BY          HELD BY          BENEFICIALLY
                                                         OCCUPATION(S)           DIRECTOR OR         DIRECTOR OR          OWNED AT
NAME, ADDRESS(1)   POSITION(S)     LENGTH OF              DURING PAST            NOMINEE FOR          NOMINEE FOR         MARCH 16,
      & AGE         WITH FUND     TIME SERVED             FIVE YEARS               DIRECTOR            DIRECTOR            2006(3)
----------------   -----------    -----------      --------------------------  ---------------   ---------------------  ------------
                                                                                                           
                                                    NON-INTERESTED DIRECTORS

Dr. Frank           Director      Since 2005       Deputy Chairman of the            3           Director of The             None
Tromel, 70(4)                                      Supervisory Board of                          Central Europe and
                                                   DELTON AG (strategic                          Russia Fund, Inc.
                                                   management holding company                    (since 2005) and The
                                                   operation in the                              New Germany Fund,
                                                   pharmaceutical, household                     Inc. (since 1990).
                                                   products, logistics and
                                                   power supply sectors)
                                                   (since 2000). Member
                                                   (since 2000) and
                                                   Vice-President (since
                                                   2002) of the German
                                                   Accounting Standards
                                                   Board; Chairman of the
                                                   Board of Managing
                                                   Directors of DELTON AG
                                                   (1990-1999); Chairman of
                                                   the Board of Managing
                                                   Directors of ALTANA AG
                                                   (management holding
                                                   company for the
                                                   pharmaceutical and
                                                   chemical operation)
                                                   (1987-1990) and Member of
                                                   the Board (1977-1987).

John H.             Director      Since 2004       Consultant (since 2002);          3           Director of The New         661
Cannon, 64                                         Vice President and                            Germany Fund, Inc.
                                                   Treasurer, Venator                            (since 1990) and The
                                                   Group/Footlocker Inc.                         Central Europe and
                                                   (footwear retailer)                           Russia Fund, Inc.
                                                   (1982-2001).                                  (since 2004).(2)



                                       3


--------------------------------------------------------------------------------
                                CLASS I DIRECTORS
         (TERM WILL EXPIRE IN 2006; NOMINEES FOR TERM EXPIRING IN 2009)
--------------------------------------------------------------------------------



                                                                              NUMBER OF                                    SHARES
                                                                           PORTFOLIOS IN           OTHER                 OF COMMON
                                                                          FUND COMPLEX(2)      DIRECTORSHIPS               STOCK
                                                     PRINCIPAL              OVERSEEN BY          HELD BY               BENEFICIALLY
                                                    OCCUPATION(S)           DIRECTOR OR         DIRECTOR OR               OWNED AT
NAME, ADDRESS(1)   POSITION(S)   LENGTH OF           DURING PAST            NOMINEE FOR          NOMINEE FOR              MARCH 16,
      & AGE         WITH FUND   TIME SERVED          FIVE YEARS               DIRECTOR            DIRECTOR                 2006(3)
----------------   -----------  -----------   --------------------------  ---------------   ---------------------       ------------
                                                                                                      
                                               INTERESTED DIRECTOR(5)

Detlef              Director    Since 1986    Partner of Sal. Oppenheim         2           Director of The             None
Bierbaum, 63                                  Jr. & Cie KGaA (investment                    Central Europe and
                                              management) (over five                        Russia Fund, Inc.
                                              years).                                       (since 1990).(2)
                                                                                            Member of Supervisory
                                                                                            Board, Tertia
                                                                                            Handelsbeteiligungsgesell-
                                                                                            schaft mbH
                                                                                            (electronics
                                                                                            retailer). Member of
                                                                                            Supervisory Board,
                                                                                            Douglas AG
                                                                                            (retailer). Member of
                                                                                            Supervisory Board,
                                                                                            LVM
                                                                                            Landwirtschaftlicher
                                                                                            Versicherungsverein
                                                                                            (insurance). Member
                                                                                            of Supervisory Board,
                                                                                            Monega KAG. Member of
                                                                                            Supervisory Board,
                                                                                            AXA Investment
                                                                                            Managers GmbH
                                                                                            (investment company).
                                                                                            Chairman of
                                                                                            Supervisory Board,
                                                                                            Oppenheim
                                                                                            Kapitalanlagegesellschaft
                                                                                            mbH (investment
                                                                                            company). Chairman of
                                                                                            Administrative Board,
                                                                                            Oppenheim Prumerica
                                                                                            Asset Management
                                                                                            S.a.r.l. (investment
                                                                                            company). Member of
                                                                                            Supervisory Board,
                                                                                            Atradius N.V.
                                                                                            (insurance company).
                                                                                            Member of the
                                                                                            Supervisory Board of
                                                                                            DWS Investment GmbH.
                                                                                            Member of the Board
                                                                                            of Duindee REIT,
                                                                                            Toronto.



                                       4


--------------------------------------------------------------------------------
                               CLASS III DIRECTOR
          (TERM WILL EXPIRE IN 2006; NOMINEE FOR TERM EXPIRING IN 2008)
--------------------------------------------------------------------------------



                                                                              NUMBER OF                                    SHARES
                                                                           PORTFOLIOS IN           OTHER                 OF COMMON
                                                                          FUND COMPLEX(2)      DIRECTORSHIPS               STOCK
                                                     PRINCIPAL              OVERSEEN BY          HELD BY               BENEFICIALLY
                                                    OCCUPATION(S)           DIRECTOR OR         DIRECTOR OR               OWNED AT
NAME, ADDRESS(1)   POSITION(S)   LENGTH OF           DURING PAST            NOMINEE FOR          NOMINEE FOR              MARCH 16,
      & AGE         WITH FUND   TIME SERVED          FIVE YEARS               DIRECTOR            DIRECTOR                 2006(3)
----------------   -----------  -----------   --------------------------  ---------------   ---------------------       ------------
                                                                                                      
                                                 NON-INTERESTED DIRECTOR

Dr. Kurt W.         Director      Since 2004    Member of the Board of            2           Director of The             None
Bock, 47                                        Executive Directors and                       Central Europe and
                                                CFO, BASF                                     Russia Fund, Inc.
                                                Aktiengesellschaft                            (since 2004).(2)
                                                (chemicals) (since 2003);                     Member of the
                                                President, Logistics and                      Supervisory Boards of
                                                Information Services, BASF                    Wintershall AG (since
                                                Aktiengesellschaft                            2003) and Basell N.V.
                                                (2000-2003); Chief                            (since 2003). Member
                                                Financial Officer, BASF                       of the Advisory
                                                Corporation (1998-2000).                      Boards of WINGAS GmbH
                                                Managing Director, Robert                     (since 2003), WIEH
                                                Bosch Ltda. (automotive                       GmbH (since 2003),
                                                and industrial products)                      Landesbank
                                                (1996-1998); Senior Vice                      Baden-Wurttemberg
                                                President, Finance and                        (since 2003),
                                                Accounting, Robert Bosch                      Initiative D21 (since
                                                GmbH (1994-1996); Senior                      2003), DBW ("Die
                                                Vice President, Finance,                      Betriebswirtschaft")
                                                Robert Bosch GmbH                             (since 2003), and
                                                (1992-1994); Head of                          Gesellschaft fur
                                                Technology, Planning and                      Unternehmensplanung
                                                Controlling, Engineering                      (IUP) (since 2004).
                                                Plastics division, BASF                       Member of the Boards
                                                Aktiengesellschaft                            of BASFIN Corporation
                                                (1991-1992); Executive                        (since 2002),
                                                Assistant to BASF's Chief                     Deutsches
                                                Financial Officer                             Rechnungslegungs
                                                (1987-1991).                                  Standards Committee
                                                                                              ("DRSC") (since
                                                                                              2003),
                                                                                              Schmalenbachgesellschaft
                                                                                              (since 2004), and
                                                                                              Jacob Gould Schurman
                                                                                              Stiftung (since
                                                                                              2004). Member of the
                                                                                              Trustees of
                                                                                              Arbeitskreis
                                                                                              Evangelischer
                                                                                              Unternehmer ("AEU")
                                                                                              (since 2003). Member
                                                                                              of the Advisory
                                                                                              Council of Deutsche
                                                                                              Bank AG (since June
                                                                                              2004). Member of the
                                                                                              Advisory Board of
                                                                                              Gebr. Rochling KG
                                                                                              (since May 2004).



                                       5


DIRECTORS WHOSE TERMS WILL CONTINUE:
--------------------------------------------------------------------------------
                               CLASS II DIRECTORS
                           (TERM WILL EXPIRE IN 2007)
--------------------------------------------------------------------------------



                                                                                   NUMBER OF                               SHARES
                                                                                PORTFOLIOS IN           OTHER            OF COMMON
                                                                               FUND COMPLEX(2)      DIRECTORSHIPS          STOCK
                                    TERM OF                PRINCIPAL              OVERSEEN BY          HELD BY          BENEFICIALLY
                                  OFFICE AND             OCCUPATION(S)           DIRECTOR OR         DIRECTOR OR          OWNED AT
NAME, ADDRESS(1)   POSITION(S)     LENGTH OF              DURING PAST            NOMINEE FOR          NOMINEE FOR         MARCH 16,
      & AGE         WITH FUND     TIME SERVED             FIVE YEARS               DIRECTOR            DIRECTOR            2006(3)
----------------   -----------    -----------      --------------------------  ---------------   ---------------------  ------------
                                                                                                          
                                                    NON-INTERESTED DIRECTORS

Ambassador          Director      Since 2000       Chairman, Diligence LLC            3          Director of The            4,120
Richard R.                                         (international information                    Central Europe and
Burt, 59                                           collection and                                Russia Fund, Inc.
                                                   risk-management firm)                         (since 2000) and The
                                                   (since 2002). Chairman,                       New Germany Fund,
                                                   IEP Advisors LLP                              Inc. (since 2004).(2)
                                                   (information services                         Board Member, IGT,
                                                   firm) (1998- 2001).                           Inc. (gaming
                                                   Chairman of the Board,                        technology) (since
                                                   Weirton Steel Corp.                           1995). Board Member,
                                                   (1996-2004). Formerly,                        HCL Technologies,
                                                   Partner, McKinsey &                           Inc. (information
                                                   Company (consulting firm)                     technology and
                                                   (1991-1994). U.S.                             product engineering)
                                                   Ambassador to the Federal                     (since 1999). Member,
                                                   Republic of Germany                           Textron Inc.
                                                   (1985-1991).                                  International
                                                                                                 Advisory Council
                                                                                                 (aviation,
                                                                                                 automotive,
                                                                                                 industrial operations
                                                                                                 and finance) (since
                                                                                                 1996). Director, UBS
                                                                                                 family of mutual
                                                                                                 funds (since 1995).

Robert H.           Director      Since 1986       President, Robert H.              91          Director of The New        4,881
Wadsworth, 66                                      Wadsworth Associates, Inc.                    Germany Fund, Inc.
                                                   (consulting firm) (May                        (since 1992) and The
                                                   1983 to present).                             Central Europe and
                                                   Formerly, President and                       Russia Fund, Inc.
                                                   Trustee, Trust for                            (since 1990) as well
                                                   Investment Managers                           as other funds in the
                                                   (registered investment                        Fund Complex as
                                                   companies) (April                             indicated.(7)
                                                   1999-June 2002).
                                                   President, Investment
                                                   Company Administration,
                                                   L.L.C. (January
                                                   1992(6)-July 2001).
                                                   President, Treasurer and
                                                   Director, First Fund
                                                   Distributors, Inc. (mutual
                                                   fund distribution) (June
                                                   1990-January 2002). Vice
                                                   President, Professionally
                                                   Managed Portfolios (May
                                                   1991-January 2002) and
                                                   Advisors Series Trust
                                                   (registered investment
                                                   companies) (October
                                                   1996-January 2002).

                                                    INTERESTED DIRECTOR(5)

John Bult, 70       Director      Since 1986       Chairman, PaineWebber              3          Director of The New        3,013
                                                   International (asset                          Germany Fund, Inc.
                                                   management) (since 1985).                     (since 1990) and The
                                                                                                 Central Europe and
                                                                                                 Russia Fund, Inc.
                                                                                                 (since 1990).(2)
                                                                                                 Director of The
                                                                                                 Greater China Fund,
                                                                                                 Inc. (closed-end
                                                                                                 fund).



                                       6


--------------------------------------------------------------------------------
                               CLASS III DIRECTORS
                             (TERM WILL EXPIRE 2008)
--------------------------------------------------------------------------------



                                                                                   NUMBER OF                               SHARES
                                                                                PORTFOLIOS IN           OTHER            OF COMMON
                                                                               FUND COMPLEX(2)      DIRECTORSHIPS          STOCK
                                    TERM OF                PRINCIPAL              OVERSEEN BY          HELD BY          BENEFICIALLY
                                  OFFICE AND             OCCUPATION(S)           DIRECTOR OR         DIRECTOR OR          OWNED AT
NAME, ADDRESS(1)   POSITION(S)     LENGTH OF              DURING PAST            NOMINEE FOR          NOMINEE FOR         MARCH 16,
      & AGE         WITH FUND     TIME SERVED             FIVE YEARS               DIRECTOR            DIRECTOR            2006(3)
----------------   -----------    -----------      --------------------------  ---------------   ---------------------  ------------
                                                                                                          

                                                    NON-INTERESTED DIRECTOR

Werner              Director      Since 1986       President and Chief               3           Director of The            5,551
Walbrol, 68                                        Executive Officer, The                        Central Europe and
                                                   European American Chamber                     Russia Fund, Inc.
                                                   of Commerce, Inc.                             (since 1990) and The
                                                   Formerly, President and                       New Germany Fund,
                                                   Chief Executive Officer,                      Inc. (since 2004)(2);
                                                   The German American                           Director, TUV
                                                   Chamber of Commerce, Inc.                     Rheinland of North
                                                   (until 2003).                                 America, Inc.
                                                                                                 (independent testing
                                                                                                 and assessment
                                                                                                 services). Director,
                                                                                                 The German American
                                                                                                 Chamber of Commerce,
                                                                                                 Inc. President and
                                                                                                 Director,
                                                                                                 German-American
                                                                                                 Partnership Program
                                                                                                 (student exchange
                                                                                                 programs). Director,
                                                                                                 AXA Art Insurance
                                                                                                 Corporation (fine art
                                                                                                 and collectible
                                                                                                 insurer).

                                                    INTERESTED DIRECTOR(5)

Christian H.        Director and  Since 1986       Member of supervisory             3           Director of The New        None
Strenger, 62        Chairman                       board (since 1999) and                        Germany Fund, Inc.
                                                   formerly Managing Director                    (since 1990) and The
                                                   (1991-1999) of DWS                            Central Europe and
                                                   Investment GmbH                               Russia Fund, Inc.
                                                   (investment management), a                    (since 1990).(2)
                                                   subsidiary of Deutsche                        Member, Supervisory
                                                   Bank AG.                                      Board, Fraport AG
                                                                                                 (international
                                                                                                 airport business) and
                                                                                                 Hermes Focus Asset
                                                                                                 Management Europe
                                                                                                 Ltd. (asset
                                                                                                 management).



                                       7


--------------------------------------------------------------------------------
                              EXECUTIVE OFFICERS(8)
--------------------------------------------------------------------------------



                                                                                                                          SHARES
                                                                                                                         OF COMMON
                                                                                                                           STOCK
                                           TERM OF                                                                      BENEFICIALLY
                                         OFFICE AND                                                                       OWNED AT
NAME, ADDRESS(1)        POSITION(S)       LENGTH OF                        PRINCIPAL  OCCUPATION(S)                       MARCH 16,
      & AGE              WITH FUND       TIME SERVED                       DURING PAST FIVE YEARS                          2006(3)
----------------      ---------------    -----------      ---------------------------------------------------------     ------------
                                                                                                                
Michael Colon,        President and      Since 2006       Director, Deutsche Asset Management and Chief Operating           None
36                    Chief Executive                     Officer, Deutsche Investment Management Americas, Inc.
                      Officer                             (since 2005). Formerly, Chief Operating Officer, Deutsche
                                                          Bank Alex. Brown (2002-2004) and Chief Operating Officer -
                                                          Global Equities, Deutsche Bank (1999-2002).

Paul H.               Treasurer and      Since 2004       Managing Director, Deutsche Asset Management (since 2004).        None
Schubert, 43          Chief Financial                     Formerly, Executive Director, Head of Mutual Fund Services
                      Officer                             and Treasurer for UBS Family of Funds at UBS Global Asset
                                                          Management (1994-2004); Vice President and Director of
                                                          Mutual Fund Finance at UBS Global Asset Management
                                                          (1994-1998).

John Millette,        Secretary          Since 2006       Director, Deutsche Asset Management (since 2002).                 None
43(9)

Kathleen              Assistant          Since 2003       Director, Deutsche Asset Management (since 2002). Formerly,       None
Sullivan              Treasurer                           Senior Vice President, Zurich Scudder Investments
D'Eramo, 49(9)                                            (2000-2002).

Elisa D.              Chief Legal        Since 2005       Director, Deutsche Asset Management (since Sept. 2005);           None
Metzger, 43           Officer                             Counsel, Morrison and Foerster LLP (1999-2005).

Philip Gallo, 43      Chief Compliance   Since 2004       Global Head of Asset Management Compliance, Deutsche Asset        None
                      Officer                             Management (since 2003). Formerly, Co-Head of Goldman Sachs
                                                          Asset Management Legal (1994-2003).


-------
(1)   The mailing  address of all  directors  and officers  with respect to Fund
      operations is c/o Deutsche  Investment  Management Americas Inc., 345 Park
      Avenue, NYC20-2799, New York, New York 10154.

(2)   The Fund Complex includes The Central Europe and Russia Fund, Inc. and The
      New  Germany  Fund,  Inc.,  which  are  the  other  closed-end  registered
      investment  companies for which Deutsche  Investment  Management  Americas
      Inc.  acts as manager.  It also  includes  159 other open- and  closed-end
      funds  advised by wholly owned  entities of the Deutsche Bank Group in the
      United States.

(3)   All Directors and Executive  Officers as a group (15 persons) owned 18,226
      shares,  which constitutes less than 1% of the outstanding Common Stock of
      the Fund.  Share numbers in this Proxy  Statement have been rounded to the
      nearest whole share.

(4)   Dr.  Tromel's  son has been  employed  since  March 1, 2002 by an indirect
      subsidiary of Deutsche Bank AG.

(5)   Indicates  "Interested  Person", as defined in the Investment Company Act.
      Mr. Bierbaum is an "interested"  Director  because of his affiliation with
      Sal.  Oppenheim Jr. & Cie. KGaA,  which engages in brokerage  transactions
      with the Fund and other accounts managed by the Fund's investment  adviser
      and  manager.  Mr.  Bult  is  an  "interested"  Director  because  of  his
      affiliation with PaineWebber International, an affiliate of UBS Securities
      L.L.C.,  a  registered  broker-dealer.  Mr.  Strenger  is an  "interested"
      Director  because of his affiliation  with  DWS-Deutsche  Gesellschaft fur
      Wertpapiersparen mbH ("DWS"), a majority-owned subsidiary of Deutsche Bank
      AG, and because of his ownership of Deutsche Bank AG shares.

(6)   Inception date of the corporation  that was the predecessor to the limited
      liability company.

(7)   Mr. Wadsworth  serves as a  Director/Trustee  of the following  investment
      companies:  DWS Blue Chip Fund, DWS Equity Trust,  DWS High Income Series,
      DWS State Tax-Free  Income Series,  DWS Strategic  Income Fund, DWS Target
      Fund, Cash Account Trust,  Investors Cash Trust,  Investors Municipal Cash
      Fund,  Tax-Exempt  California  Money Market Fund, DWS Technology Fund, DWS
      Balanced Fund, DWS U.S. Government Securities Fund, DWS Value Series Inc.,
      DWS Variable Series II, and DWS Money Funds.  Mr. Wadsworth also serves as
      a Trustee  of the  following  closed-end  investment  companies:  DWS High
      Income Trust, DWS  Multi-Market  Income Trust, DWS Municipal Income Trust,
      DWS Strategic  Income Trust,  and DWS  Strategic  Municipal  Income Trust.
      These funds are advised by Deutsche Investment Management Americas Inc., a
      wholly-owned subsidiary of Deutsche Bank AG.

(8)   Each also  serving as an officer of The New  Germany  Fund,  Inc.  and The
      Central Europe and Russia Fund,  Inc. The officers of the Fund are elected
      annually by the Board of  Directors  at its meeting  following  the Annual
      Meeting of Stockholders.  Each of Mr. Colon,  Mr. Schubert,  Mr. Millette,
      Mr.  Gallo,  Ms.  D'Eramo and Ms.  Metzger also serve as an officer of the
      other Funds in the Fund Complex.

(9)   Indicates  ownership of securities of Deutsche Bank AG either  directly or
      through Deutsche Bank's deferred compensation plan.


                                       8


      The following table contains  additional  information  with respect to the
beneficial  ownership of equity  securities  by each  Director or Nominee in the
Fund  and,  on an  aggregated  basis,  in any  registered  investment  companies
overseen  by the  Director  or  Nominee  within  the same  Family of  Investment
Companies as the Fund:



                                                                          AGGREGATE DOLLAR RANGE OF EQUITY
                                                                         SECURITIES IN ALL FUNDS OVERSEEN BY
                                           DOLLAR RANGE OF EQUITY         DIRECTOR OR NOMINEE IN FAMILY OF
      NAME OF DIRECTOR OR NOMINEE         SECURITIES IN THE FUND(1)          INVESTMENT COMPANIES(1),(2)
      ---------------------------         -------------------------      -----------------------------------
                                                                           
      Detlef Bierbaum                               None                                None
      Dr. Kurt W. Bock                              None                                None
      John Bult                               $10,001 - $50,000                     Over $100,000
      Ambassador Richard R. Burt              $10,001 - $50,000                     Over $100,000
      John H. Cannon                            $1 - $10,000                     $50,001 - $100,000
      Christian H. Strenger                         None                         $50,001 - $100,000
      Dr. Frank Tromel                              None                                None
      Robert H. Wadsworth                     $10,001 - $50,000                     Over $100,000
      Werner Walbrol                         $50,001 - $100,000                     Over $100,000


----------

(1)   Valuation date is March 16, 2006. Directors who are German residents would
      be subject to adverse  German tax  consequences  if they owned shares of a
      fund organized  outside Germany,  such as the Fund, that is not subject to
      German regulation or tax reporting.

(2)   The Family of Investment  Companies  consists of the Fund, The New Germany
      Fund,  Inc.  and The  Central  Europe and  Russia  Fund,  Inc.,  which are
      closed-end  funds that share the same  investment  adviser and manager and
      hold themselves out as related companies.

      The Board of Directors presently has five standing committees including an
audit committee (the "Audit  Committee"),  an advisory  committee (the "Advisory
Committee"),  an executive committee (the "Executive  Committee"),  a nominating
committee (the  "Nominating  Committee") and a special  committee on shareholder
initiatives (the "Special Shareholder Initiatives Committee").

      The Audit Committee,  comprising Messrs. Cannon, Wadsworth and Walbrol and
Dr.  Tromel,  operates  pursuant  to a written  charter.  The Audit  Committee's
organization and  responsibilities  are contained in the Audit Committee Report,
which is  included in this Proxy  Statement,  and in its  written  charter.  The
members of the Audit Committee are "independent" as required by the independence
standards of Rule 10A-3 under the Securities  Exchange Act of 1934. The Board of
Directors has determined  that each member of the Audit Committee is financially
literate and has determined that each of Messrs.  Cannon and Wadsworth meets the
requirements  for an audit  committee  financial  expert  under the rules of the
Securities and Exchange  Commission  ("SEC").  Although the Board has determined
that these  individuals meet the  requirements for an audit committee  financial
expert,  their  responsibilities  are  the  same as  those  of the  other  audit
committee members.  They are not auditors or accountants,  do not perform "field
work" and are not  full-time  employees.  The SEC has  determined  that an audit
committee  member who is designated as an audit committee  financial expert will
not be deemed to be an "expert" for any purpose as a result of being  identified
as an audit  committee  financial  expert.  The Audit  Committee  met five times
during the fiscal year ended December 31, 2005.

      The  Advisory  Committee,   comprising  Messrs.  Bierbaum,  Wadsworth  and
Walbrol,  makes recommendations to the full Board with respect to the Management
Agreement between the Fund and Deutsche Investment Management Americas Inc., and
the Investment Advisory Agreement between the Fund and Deutsche Asset Management
International  GmbH ("DeAM").  The Advisory  Committee met four times during the
past fiscal year, in connection with the annual continuance of those agreements.


                                       9


      The Executive Committee,  comprising Messrs. Burt, Strenger, Wadsworth and
Walbrol,  has the authority to act for the Board on all matters between meetings
of the Board subject to any limitations  under  applicable state law. During the
past fiscal year the Executive Committee did not meet.

      The Special Shareholder  Initiatives  Committee,  comprising Messrs. Bult,
Burt, Cannon,  Wadsworth and Walbrol,  has the authority to act for the Board on
all  matters  relating  to  stockholder  initiatives.  The  Special  Shareholder
Initiatives Committee met two times during the past fiscal year.

      The Nominating Committee comprises of Messrs. Burt, Wadsworth and Walbrol.
The Board has determined that each of the members of the Nominating Committee is
not an  "interested  person" as the term is defined in Section  2(a)(19)  of the
Investment  Company  Act.  Generally,   the  Nominating  Committee   identifies,
evaluates  and selects and  nominates,  or recommends to the Board of Directors,
candidates  for the Board or any  committee  of the Board.  To be  eligible  for
nomination as a Director a person must, at the time of such person's nomination,
have Relevant Experience and Country Knowledge and must not have any Conflict of
Interest, as those terms are defined in the Fund's Bylaws. The relevant portions
of the Fund's Bylaws describing these  requirements are included as Annex B. The
Nominating Committee may also take into account additional factors listed in the
Nominating  Committee Charter,  which generally relate to the nominee's industry
knowledge, business experience,  education, ethical reputation,  special skills,
ability  to work  well in  group  settings  and the  ability  to  qualify  as an
"independent director."

      The  Nominating   Committee  will  consider  nominee  candidates  properly
submitted by  stockholders in accordance with applicable law, the Fund's Charter
or Bylaws,  resolutions of the Board and the  qualifications  and procedures set
forth in the  Nominating  Committee  Charter set forth in Annex A and this proxy
statement.  A stockholder or group of  stockholders  seeking to submit a nominee
candidate  (i) must have  beneficially  owned at least 5% of the  Fund's  common
stock for at least two years, (ii) may submit only one nominee candidate for any
particular meeting of stockholders, and (iii) may submit a nominee candidate for
only an annual meeting or other meeting of  stockholders at which directors will
be elected.  The stockholder or group of stockholders must provide notice of the
proposed  nominee  pursuant  to the  requirements  found in the  Fund's  Bylaws.
Generally,  this notice must be received not less than 90 days nor more than 120
days prior to the first anniversary of the date of mailing of the notice for the
preceding  year's  annual  meeting.  Such  notice  shall  include  the  specific
information  required by the Fund's  Bylaws.  The relevant  portions  describing
these  requirements  are  included  as Annex B. The  Nominating  Committee  will
evaluate nominee candidates properly submitted by stockholders on the same basis
as it considers and  evaluates  candidates  recommended  by other  sources.  The
Nominating Committee met two times during the past fiscal year.

      All  members  on  each  of the  five  committees  of  the  Board  are  not
"interested  persons"  as the term is  defined  in the  Investment  Company  Act
(except that Mr. Strenger,  an interested  person,  is a member of the Executive
Committee;  Mr.  Bierbaum,  an  interested  person,  is a member of the Advisory
Committee;  and Mr.  Bult,  an  interested  person,  is a member of the  Special
Shareholder Initiatives Committee).

      During the past  fiscal  year,  the Board of  Directors  had five  regular
meetings.  Each  incumbent  Director  who served as a  Director  during the past
fiscal  year,  with the  exception  of Mr.  Bock,  attended  at least 75% of the
aggregate  number of meetings of the Board and meetings of Board  Committees  on
which that Director served. The Board has a policy that encourages  Directors to
attend the Annual  Meeting of  Stockholders,  to the extent  that  travel to the
Annual Meeting of Stockholders  is reasonable for that Director.  Four Directors
attended the 2005 Annual Meeting of Stockholders.


                                       10


      To  communicate  with the Board of Directors or an individual  Director of
the  Fund,  a  stockholder  must  send a  written  communication  to the  Fund's
principal office at 345 Park Avenue,  NYC20-2799,  New York, New York 10154 (c/o
The European Equity Fund, Inc.),  addressed to (i) the Board of Directors of the
Fund or an  individual  Director,  and  (ii)  the  Secretary  of the  Fund.  The
Secretary of the Fund will direct the correspondence to the appropriate parties.

      The Fund pays each of its Directors who is not an interested person of the
Fund, of the  investment  adviser or of the manager an annual fee of $7,500 plus
$750 for each Board and Committee  meeting  attended.  Each such Director who is
also a Director of The New Germany Fund,  Inc. or The Central  Europe and Russia
Fund, Inc. also receives the same annual and per-meeting  fees for services as a
Director of each such fund. No Director of all three funds is paid for attending
more than two funds' board and  committee  meetings  when  meetings of the three
funds are held concurrently,  and no such Director receives more than the annual
fee of two funds. Each of the Fund, The Central Europe and Russia Fund, Inc. and
The New Germany Fund, Inc.  reimburses the Directors  (except for those employed
by the  Deutsche  Bank  Group)  for travel  expenses  in  connection  with Board
meetings.  These three funds, together with 159 other open- and closed-end funds
advised  by  wholly-owned  entities  of the  Deutsche  Bank  Group in the United
States,  represent the entire Fund Complex  within the meaning of the applicable
rules  and  regulations  of the SEC.  The  following  table  sets  forth (a) the
aggregate  compensation  from the Fund for the fiscal  year ended  December  31,
2005,  and (b) the total  compensation  from each fund in the Fund  Complex that
includes  the Fund,  for the 2005  fiscal  year of each such fund,  (i) for each
Director  who is not an  interested  person of the  Fund,  and (ii) for all such
Directors as a group:



                                               AGGREGATE COMPENSATION            TOTAL COMPENSATION
            NAME OF DIRECTOR                         FROM FUND                   FROM FUND COMPLEX
            ----------------                   ----------------------            ------------------
                                                                                
      Dr. Kurt W. Bock                                $ 9,000                         $ 18,750
      Ambassador Richard R. Burt                      $15,750                         $195,030
      John H. Cannon                                  $13,750                         $ 48,500
      Dr. Frank Tromel                                $ 4,750                         $ 20,500
      Robert H. Wadsworth                             $17,000                         $224,260
      Werner Walbrol                                  $18,250                         $ 53,000
                                                      -------                         --------
                        Total                         $78,500                         $560,040
                                                      =======                         ========


      No  compensation  is paid  by the  Fund to  Directors  who are  interested
persons of the Fund or of any entity of the Deutsche Bank Group or to officers.

             THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1.

      REQUIRED VOTE.  Provided a quorum has been  established,  the  affirmative
vote of a  plurality  of the  votes  cast at the  Meeting  is  required  for the
election  of  each  Director.   For  purposes  of  the  election  of  Directors,
abstentions will have no effect on the result of the vote.

       PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS

      The Audit Committee has approved PricewaterhouseCoopers LLP (the "Firm" or
"PwC"),  an  independent  registered  public  accounting  firm,  as  independent
auditors  for the Fund for the fiscal year ending  December 31, 2006. A majority
of members of the Board of Directors, including a majority of the members of the
Board  of  Directors  who are not  "interested"  Directors  (as  defined  in the
Investment Company Act) of the Fund, have ratified the appointment of PwC as the
Fund's independent auditors for that fiscal year. Based principally on


                                       11


representations from the Firm, the Fund knows of no direct financial or material
indirect  financial  interest  of  such  Firm  in  the  Fund.  That  Firm,  or a
predecessor  firm,  has served as the  independent  auditors  for the Fund since
inception.

      Neither our Charter nor Bylaws requires that the  stockholders  ratify the
appointment  of PwC as our  independent  auditors.  We are doing so  because  we
believe it is a matter of good corporate  practice.  If the  stockholders do not
ratify the  appointment,  the Audit  Committee  and the Board of Directors  will
reconsider  whether  or not to  retain  PwC,  but may  retain  such  independent
auditors. Even if the appointment is ratified, the Audit Committee and the Board
of Directors in their  discretion may change the  appointment at any time during
the year if they  determine  that such change would be in the best  interests of
the Fund and its  stockholders.  It is intended  that the  persons  named in the
accompanying  form of proxy will vote for PwC. A  representative  of PwC will be
present at the Meeting and will have the  opportunity to make a statement and is
expected to be available to answer appropriate  questions  concerning the Fund's
financial statements.

             THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2.

      REQUIRED VOTE.  Provided a quorum has been  established,  the  affirmative
vote  of a  majority  of the  votes  cast at the  Meeting  is  required  for the
ratification  of the  appointment  by the  Audit  Committee  and  the  Board  of
Directors of PwC as independent auditors for the Fund for the fiscal year ending
December 31, 2006. For purposes of Proposal 2,  abstentions  will have no effect
on the result of the vote.

           INFORMATION WITH RESPECT TO THE FUND'S INDEPENDENT AUDITORS

      The  following  table shows fees paid to PwC by the Fund during the Fund's
two most recent fiscal years: (i) for audit and non-audit  services  provided to
the Fund, and (ii) for  engagements for non-audit  services  pre-approved by the
Audit  Committee  for the Fund's  manager  and  investment  adviser  and certain
entities  controlling,  controlled  by, or under common control with the manager
and investment adviser that provide ongoing services to the Fund  (collectively,
the "Adviser Entities"), which engagements relate directly to the operations and
financial  reporting of the Fund. The Audit Committee of each board will review,
at least  annually,  whether PwC's receipt of non-audit  fees from the Fund, the
Fund's  manager,  the Fund's  investment  adviser  and all  Adviser  Entities is
compatible with maintaining PwC's independence.



                         AUDIT FEES(1)   AUDIT RELATED FEES(2)           TAX FEES(3)          ALL OTHER FEES(4)
                         -------------   ---------------------       ------------------       ------------------
                                                       ADVISER                  ADVISER                  ADVISER
                             FUND        FUND         ENTITIES       FUND      ENTITIES       FUND      ENTITIES
                             ----        ----         --------       ----      --------       ----      --------

                                                                                       
2005....................    $57,600       --          $268,900         --       $197,605      $6,825        --
2004....................    $54,900       --          $431,907      $6,700         --         $6,500        --


----------
(1)   "Audit Fees" are the aggregate fees billed for  professional  services for
      the audit of the Fund's annual financial  statements and services provided
      in connection with statutory and regulatory filings or engagements.

(2)   "Audit  Related  Fees" are the  aggregate  fees billed for  assurance  and
      related  services  reasonably  related to the  performance of the audit or
      review of financial statements and are not reported under "Audit Fees."

(3)   "Tax Fees" are the aggregate fees billed for professional services for tax
      advice, tax compliance and tax planning.

(4)   "All Other Fees" are the  aggregate  fees billed for products and services
      other than "Audit Fees," "Audit Related Fees" and "Tax Fees."

      Audit Committee Pre Approval Policies and Procedures. Generally, the Audit
Committee must  pre-approve (i) all services to be performed for the Fund by the
Fund's  independent  auditors and (ii) all non-audit services to be performed by
the Fund's independent auditors for the Fund's investment adviser or any Adviser
Entities with respect to operations  and  financial  reporting of the Fund.  The
Chair of the Audit Committee may approve or deny


                                       12


the request to engage the auditors to provide any fund services or  fund-related
services  that are not listed on the  pre-approved  list if the cost  associated
with the request is $50,000 or less, or at the Chair's discretion,  determine to
call a special meeting of the Audit Committee for the purpose of considering the
proposal.  Should the Chair of the Audit  Committee  be  unavailable,  any other
member of the Audit  Committee  may serve as an  alternate  for the  purpose  of
approving  or  denying  the  request.  The  auditors  shall  report to the Audit
Committee at each of its regular meetings all audit or non-audit services to the
Fund and all non-audit  services to the Adviser Entities that relate directly to
the Fund's  operations  and financial  reporting  initiated  since the last such
report  was  rendered,  including  a general  description  of the  services  and
projected  fees and the means by which such  services were approved by the Audit
Committee.   The  engagement  of  the  auditors  to  provide  certain   services
customarily  required by the Fund in the ordinary course of its operations or by
an Adviser  Entity in the ordinary  course of its  operations is approved by the
Audit Committee subject to  pre-determined  dollar limits. In all cases where an
Adviser Entity  engages the auditors to provide audit or non-audit  services not
relating to Fund operations or financial  reporting,  and the projected fees for
such engagement exceed $25,000, the auditors will notify the Audit Committee not
later than their next meeting.

      All Non-Audit  Fees.  The table below shows the aggregate  non-audit  fees
billed by PwC for services rendered to the Fund and to the Adviser Entities that
provide ongoing  services to the Fund,  whether or not such  engagements  relate
directly to the operations and financial reporting of the Fund, for the two most
recent fiscal years for the Fund.

                FISCAL YEAR                   AGGREGATE NON-AUDIT FEES
                -----------                   ------------------------
                   2005                              $309,065
                   2004                              $266,472


                                       13


                             AUDIT COMMITTEE REPORT

      The  purposes  of the  Audit  Committee  are 1) to  assist  the  Board  of
Directors  in its  oversight  of (i)  the  integrity  of  the  Fund's  financial
statements;  (ii) the Fund's compliance with legal and regulatory  requirements;
(iii) the independent  auditors'  qualifications and independence;  and (iv) the
performance of the  independent  auditors;  and 2) to prepare this report.  Each
Member of the Audit Committee is  "independent," as required by the independence
standards of Rule 10A-3 under the  Securities  Exchange  Act of 1934.  The Audit
Committee  operates  pursuant  to a written  charter.  As set forth in the Audit
Committee  Charter,  management of the Fund and applicable service providers are
responsible  for the  preparation,  presentation  and  integrity  of the  Fund's
financial  statements  and  for  the  effectiveness  of  internal  control  over
financial reporting. Management and applicable service providers are responsible
for maintaining  appropriate  accounting and financial reporting  principles and
policies and internal control over financial reporting and other procedures that
provide  for  compliance  with  accounting  standards  and  applicable  laws and
regulations.  The independent auditors are responsible for planning and carrying
out a proper audit of the Fund's annual  financial  statements and expressing an
opinion as to their conformity with generally accepted accounting principles.

      In the  performance  of its oversight  function,  the Audit  Committee has
considered and discussed the audited  financial  statements  with management and
the  independent  auditors of the Fund.  The Audit  Committee has also discussed
with the independent  auditors the matters required to be discussed by Statement
on Auditing Standards No. 61, Communication with Audit Committees,  as currently
in effect.  The Audit Committee has also considered whether the provision of any
non-audit  services  not  pre-approved  by the Audit  Committee  provided by the
Fund's independent auditors to the Fund's investment adviser,  manager or to any
entity  controlling,  controlled  by or under  common  control  with the  Fund's
investment  adviser or manager  that  provides  ongoing  services to the Fund is
compatible  with  maintaining  the auditors'  independence.  Finally,  the Audit
Committee  has  received  the  written  disclosures  and  the  letter  from  the
independent  auditors  required by Independence  Standards Board Standard No. 1,
Independence Discussions with Audit Committees,  as currently in effect, and has
discussed with the auditors their independence.

      The members of the Audit Committee are not full-time employees of the Fund
and are not performing the functions of auditors or accountants.  As such, it is
not the duty or  responsibility of the Audit Committee or its members to conduct
"field work" or other types of auditing or  accounting  reviews or procedures or
to  set  auditor  independence   standards.   Members  of  the  Audit  Committee
necessarily  rely on the  information  provided  to them by  management  and the
independent  auditors.  Accordingly,  the Audit Committee's  considerations  and
discussions  referred  to  above do not  assure  that  the  audit of the  Fund's
financial  statements has been carried out in accordance with generally accepted
auditing  standards,  that the financial  statements are presented in accordance
with generally accepted accounting principles or that the Fund's auditors are in
fact "independent."

      Based upon the reports  and  discussions  described  in this  report,  and
subject  to the  limitations  on the  role  and  responsibilities  of the  Audit
Committee referred to above and in the Charter, the Audit Committee  recommended
to the Board of Directors of the Fund that the audited  financial  statements of
the Fund be included in the Fund's annual report to stockholders  for the fiscal
year ended December 31, 2005.

Submitted by the Audit Committee
of the Fund's Board of Directors

John H. Cannon
Frank Tromel
Robert H. Wadsworth
Werner Walbrol


                                       14


                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

      As of May 12, 2006 no person,  to the  knowledge of  management,  owned of
record or beneficially more than 5% of the outstanding Common Stock of the Fund.

                    ADDRESS OF INVESTMENT ADVISER AND MANAGER

      The principal office of Deutsche Asset Management  International GmbH, the
Fund's investment adviser, is located at Mainzer  Landstrasse  178-190,  D-60327
Frankfurt am Main, Federal Republic of Germany. The corporate office of Deutsche
Investment  Management Americas Inc., the Fund's manager, is located at 345 Park
Avenue, New York, New York 10154.

                       SECTION 16(a) BENEFICIAL OWNERSHIP
                              REPORTING COMPLIANCE

      Based on a review of reports  filed by the Fund's  directors and executive
officers,  the  investment  manager,  officers and  directors of the  investment
manager,  affiliated persons of the investment manager and beneficial holders of
10% or more of the Fund's outstanding stock, and written  representations by the
Reporting  Persons that no year-end reports were required for such persons,  all
filings required by Section 16(a) of the Securities and Exchange Act of 1934 for
the fiscal year ended December 31, 2005 were timely.

                                  OTHER MATTERS

      No business  other than as set forth herein is expected to come before the
Meeting,  but should any other matter requiring a vote of stockholders  properly
come before the  Meeting,  including  any question as to an  adjournment  of the
Meeting,  the  persons  named in the  enclosed  Proxy  Card  will  vote  thereon
according to their  discretion.  Abstentions and broker  non-votes shall have no
effect on the outcome of a vote to adjourn the Meeting.

                              STOCKHOLDER PROPOSALS

      In order for stockholder  proposals  otherwise  satisfying the eligibility
requirements  of SEC Rule 14a-8 to be  considered  for  inclusion  in the Fund's
proxy statement for the 2007 Annual  Meeting,  the proposals must be received at
The European Equity Fund, Inc., c/o Deutsche Asset Management,  345 Park Avenue,
NYC20-2799, New York, New York 10154, Attention: Secretary, on or before January
17, 2007.

      In addition,  the Fund's  Bylaws  currently  provide that if a stockholder
desires  to bring  business  (including  director  nominations)  before the 2007
Annual Meeting that is or is not the subject of a proposal timely  submitted for
inclusion  in the Fund's proxy  statement,  written  notice of such  business as
prescribed  in the Bylaws  must be  delivered  to the Fund's  Secretary,  at the
principal  executive offices of the Fund,  between January 17, 2007 and February
16, 2007. For additional requirements,  the stockholder may refer to the Bylaws,
a current  copy of which may be obtained  without  charge upon  request from the
Fund's  Secretary.  If the Fund does not receive  timely notice  pursuant to the
Bylaws,  the  proposal  may be  excluded  from  consideration  at  the  meeting,
regardless of any earlier notice provided in accordance with SEC Rule 14a-8.


                                       15


                         EXPENSES OF PROXY SOLICITATION

      The cost of preparing,  assembling and mailing material in connection with
this  solicitation  will be borne by the Fund.  In addition to the use of mails,
proxies may be  solicited  personally  by regular  employees  of the Fund or the
manager  or by  telephone  or  telegraph.  Brokerage  houses,  banks  and  other
fiduciaries  may be requested to forward proxy  solicitation  materials to their
principals to obtain  authorization for the execution of proxies,  and they will
be  reimbursed  by  the  Fund  for  out-of-pocket   expenses  incurred  in  this
connection.  The Fund has also  made  arrangements  with  Georgeson  Shareholder
Communications, Inc. to assist in the solicitation of proxies, if called upon by
the Fund, at an estimated fee not to exceed $9,500 plus  reimbursement of normal
expenses.

                             ANNUAL REPORT DELIVERY

      The Fund will furnish, without charge, a copy of its annual report for the
fiscal year ended December 31, 2005 and the most recent  semi-annual  report, if
any, to any stockholder  upon request.  Such requests should be directed by mail
to The European  Equity Fund,  Inc.,  c/o Deutsche  Asset  Management,  345 Park
Avenue,  NYC20-2799, New York, New York 10154 or by telephone to 1-800-437-6269.
Annual reports are also available on the Fund's web site: www.germanyfund.com.

                                                              John Millette
                                                              Secretary

Dated: May 17, 2006

STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE
THEIR  SHARES VOTED ARE  REQUESTED TO DATE AND SIGN THE ENCLOSED  PROXY CARD AND
RETURN IT TO THE FUND AS SOON AS PRACTICABLE.


                                       16


                                                                         ANNEX A

                            THE EUROPEAN EQUITY FUND
                                  (THE "FUND")

                          NOMINATING COMMITTEE CHARTER

                          ADOPTED AS OF APRIL 23, 2004

      The Board of Directors  (the "Board") of the Fund has adopted this Charter
to govern the activities of the Nominating  Committee (the  "Committee")  of the
Board.

STATEMENT OF PURPOSES AND RESPONSIBILITIES

      The primary purposes and responsibilities of the Committee are:

              (i)    to identify individuals  qualified to become members of the
                     Board in the event that a position is vacated or created;

              (ii)   to consider all  candidates  proposed to become  members of
                     the Board,  subject to applicable  law, the Fund's Articles
                     of Incorporation  or By-laws,  resolutions of the Board and
                     the  procedures  and policies set forth in this Charter and
                     the Fund's annual proxy statement;

              (iii)  to select and nominate,  or recommend for nomination by the
                     Board, candidates for election as Directors;

              (iv)   in the case of a director  nominee to fill a Board  vacancy
                     created by an increase in the size of the Board,  to make a
                     recommendation to the Board as to the class of directors in
                     which the individual should serve;

              (v)    to make  recommendations  to the Board from time to time as
                     to any changes that the Committee  believes to be desirable
                     to the provisions of the Fund's By-laws  regarding  minimum
                     standards and  qualifications  for service as a Director on
                     the  Board or to any  charter  of  committees  of the Board
                     regarding minimum standards and  qualifications for service
                     as a committee member, and to recommend to the Board, or to
                     set, any additional standards or qualifications  considered
                     necessary  or  desirable  for  service as a Director on the
                     Board or as a member of a committee of the Board;

              (vi)   to identify  Board members  qualified to fill  vacancies on
                     any  committee  of  the  Board,  taking  into  account  any
                     qualifications  or other  criteria set forth in the charter
                     of that committee,  and to recommend that the Board appoint
                     the identified member or members to that committee;

              (vii)  to make  recommendations  to the Board from time to time as
                     to changes that the  Committee  believes to be desirable to
                     the size of the Board or any committee thereof;

              (viii) to review with counsel, at least annually,  each Director's
                     affiliations and  relationships for purposes of determining
                     whether such Director is a person who is not an "interested
                     person" of the Fund, as defined in Section  2(a)(19) of the
                     Investment Company Act of 1940, as amended.

              (ix)   to assist  management in the  preparation of the disclosure
                     in  the  Fund's  annual  proxy   statement   regarding  the
                     operations of the Committee; and

              (x)    to perform any other duties or  responsibilities  expressly
                     delegated  to the  Committee by the Board from time to time
                     relating to the nomination of Board or committee members.


                                      A-1


ORGANIZATION AND GOVERNANCE

      The Committee  shall consist solely of three or more members of the Board.
The Committee  must consist  entirely of Board  members who are not  "interested
persons" of the Fund, as defined in Section  2(a)(19) of the Investment  Company
Act of 1940, as amended  ("Independent  Directors").  Members shall serve at the
pleasure of the Board and for such term or terms as the Board may determine.

      One or more members of the Committee may be designated by the Board as the
Committee's chairperson or co-chairperson, as the case may be.

      The  Committee  shall  meet  at  least  once a year  at a time  and  place
determined  by the Committee  chairperson,  with further  meetings to occur,  or
actions to be taken by  unanimous  written  consent,  when deemed  necessary  or
desirable by the  Committee or its  chairperson.  Members of the  Committee  may
participate in a meeting of the Committee by means of conference call or similar
communications  equipment  by means of which all  persons  participating  in the
meeting can hear each other. Committee meetings shall be held in accordance with
the Fund's By-laws.

CRITERIA FOR DIRECTOR NOMINEES

      To be eligible for  nomination as a Director a person must, at the time of
such person's  nomination,  have Relevant  Experience and Country Knowledge,  as
defined in the Fund's  By-laws,  and must not have any Conflict of Interest,  as
defined  in the  Fund's  By-laws.  Whether  a  proposed  nominee  satisfies  the
foregoing  qualifications  shall  be  determined  by the  Committee  in its sole
discretion.  The  Committee may also take into account a wide variety of factors
in  considering  Director  candidates,  including  (but not limited to): (i) the
candidate's  knowledge in matters relating to the investment  company  industry;
(ii) any  experience  possessed by the candidate as a director or senior officer
of  other  public  or  private  companies;  (iii)  the  candidate's  educational
background;  (iv) the  candidate's  reputation  for high ethical  standards  and
personal and professional  integrity;  (v) any specific financial,  technical or
other  expertise  possessed  by the  candidate,  and the  extent  to which  such
expertise   would   complement   the   Board's   existing   mix  of  skills  and
qualifications;  (vi) the  candidate's  perceived  ability to  contribute to the
ongoing functions of the Board, including the candidate's ability and commitment
to attend meetings  regularly,  work  collaboratively  with other members of the
Board and carry out his or her duties in the best  interests of the Fund;  (vii)
the candidate's ability to qualify as an Independent  Director;  and (viii) such
other criteria as the Nominating Committee determines to be relevant in light of
the existing  composition  of the Board and any  anticipated  vacancies or other
factors.

IDENTIFICATION OF NOMINEES

      In  identifying  potential  nominees  for the  Board,  the  Committee  may
consider candidates recommended by one or more of the following sources: (i) the
Fund's Directors,  (ii) the Fund's officers, (ii) the Fund's investment manager,
investment adviser or their affiliates, (iv) the Fund's stockholders (see below)
and (v) any other source the Committee  deems to be  appropriate.  The Committee
will not consider  self-nominated  candidates or candidates nominated by members
of a candidate's family, including such candidate's spouse,  children,  parents,
siblings,  uncles, aunts,  grandparents,  nieces and nephews. The Committee may,
but is not required to,  retain a third party search firm at the Fund's  expense
to identify potential candidates.


                                      A-2


CONSIDERATION OF CANDIDATES RECOMMENDED BY STOCKHOLDERS

      The  Committee  will consider  nominee  candidates  properly  submitted by
stockholders   in  accordance  with  applicable  law,  the  Fund's  Articles  of
Incorporation or By-laws,  resolutions of the Board and the  qualifications  and
procedures  set forth in this  Charter and the Fund's  annual  proxy  statement,
including the requirements  that a stockholder or group of stockholders  seeking
to submit a nominee  candidate (i) must have  beneficially  owned at least 5% of
the Fund's common stock for at least two years, (ii) may submit only one nominee
candidate for any  particular  meeting of  stockholders,  and (iii) may submit a
nominee candidate for only an annual meeting or other meeting of stockholders at
which directors will be elected.  The Committee will evaluate nominee candidates
properly  submitted  by  stockholders  on the  same  basis as it  considers  and
evaluates candidates recommended by other sources.

DELEGATION TO SUBCOMMITTEE

      The  Committee  may, in its  discretion,  delegate all or a portion of its
duties and responsibilities to a subcommittee of the Committee.

RESOURCES AND AUTHORITY OF THE COMMITTEE

      The  Committee  shall have the  resources  and  authority  appropriate  to
discharge  its duties and  responsibilities,  including the authority to select,
retain,  terminate  and  approve the fees and other  retention  terms of special
counsel  or other  experts  or  consultants,  as it deems  appropriate,  without
seeking  approval of the Board or  management.  With respect to  consultants  or
search  firms used to identify  director  candidates,  this  authority  shall be
vested solely in the Committee.


                                      A-3


                                                                         ANNEX B

                            THE EUROPEAN EQUITY FUND
                               EXCERPTS OF BY-LAWS

ARTICLE II

      Section 13. Advance Notice of Stockholder  Nominees for Director and Other
Stockholder Proposals.  (a) Annual Meetings of Stockholders.  (1) Nominations of
persons for election to the Board of  Directors  and the proposal of business to
be  considered  by  the  stockholders  may  be  made  at an  annual  meeting  of
stockholders (i) pursuant to the Corporation's notice of meeting,  (ii) by or at
the  direction  of the Board of  Directors  or (iii) by any  stockholder  of the
Corporation who was a stockholder of record both at the time of giving of notice
provided for in this Section 13(a) and at the time of the annual meeting, who is
entitled to vote at the meeting and who complied with the notice  procedures set
forth in this Section 13(a).

            (2) For nominations or other business to be properly  brought before
      an annual  meeting by a stockholder  pursuant to clause (iii) of paragraph
      (a)(1) of this Section 13, the  stockholder  must have given timely notice
      thereof in  writing to the  Secretary  of the  Corporation  and such other
      business must otherwise be a proper matter for action by the stockholders.
      To be timely,  a stockholder's  notice shall be delivered to the Secretary
      at the principal  executive  offices of the  Corporation  not less than 90
      days nor more than 120 days prior to the first  anniversary of the date of
      mailing of the notice for the preceding  year's annual meeting;  provided,
      however,  that in the event that the date of mailing of the notice for the
      annual  meeting is advanced or delayed by more than 30 days from the first
      anniversary of the date of mailing of the notice for the preceding  year's
      annual  meeting,  notice  by  the  stockholder  to be  timely  must  be so
      delivered  not earlier  than the 120th day prior to the date of mailing of
      the  notice  for such  annual  meeting  and not  later  than the  close of
      business  on the later of the 90th day prior to the date of mailing of the
      notice for such annual meeting or the tenth day following the day on which
      disclosure  of the date of mailing of the notice for such meeting is first
      made.  In no event  shall the public  announcement  of a  postponement  or
      adjournment of an annual meeting commence a new time period for the giving
      of a stockholder's  notice as described above. Such  stockholder's  notice
      shall set forth (i) as to each  person  whom the  stockholder  proposes to
      nominate  for election or  reelection  as a director,  (A) the name,  age,
      business address and residence  address of such person,  (B) the class and
      number of shares of stock of the Corporation that are  beneficially  owned
      by such person, (C) all other information  relating to such person that is
      required to be  disclosed  in  solicitations  of proxies  for  election of
      directors  in an  election  contest  (even if an  election  contest is not
      involved),  or is otherwise required,  in each case pursuant to Regulation
      14A (or any successor provision) under the Exchange Act or pursuant to the
      Investment  Company Act and the rules thereunder  (including such person's
      written  consent to being named in the proxy statement as a nominee and to
      serving as a director if elected), and (D) a statement specifying which of
      clauses  (1)-(7) of the  definition  of "Relevant  Experience  and Country
      Knowledge"  in Article  III,  Section 3 of the  Bylaws  the  person  being
      nominated  satisfies,  information  relating to such person  sufficient to
      support a determination  that the person satisfies the specified clause or
      clauses of the  definition and a  representation  that the person does not
      have a "Conflict of Interest" as defined in Article III,  Section 3 of the
      Bylaws;  (ii) as to any other  business that the  stockholder  proposes to
      bring  before the meeting,  a  description  of the business  desired to be
      brought before the meeting,  the reasons for  conducting  such business at
      the meeting and any material interest in such business of such stockholder
      (including any anticipated  benefit to the  stockholder  therefrom) and of
      each  beneficial  owner, if any, on whose behalf the proposal is made; and
      (iii) as to the stockholder  giving the notice and each beneficial  owner,
      if any, on whose behalf the


                                      B-1


      nomination  or  proposal  is  made,  (x)  the  name  and  address  of such
      stockholder,  as they  appear on the  Corporation's  stock  ledgers  and a
      current name and address, if different,  and of such beneficial owner, and
      (y) the  class  and  number  of  shares  of each  class  of  stock  of the
      Corporation which are owned beneficially and of record by such stockholder
      and owned beneficially by such beneficial owner.

            (3) Notwithstanding  anything in this subsection (a) of this Section
      13 to the  contrary,  in the  event the Board of  Directors  increases  or
      decreases the maximum or minimum  number of directors in  accordance  with
      Article  III,  Section  2  of  these  Bylaws,   and  there  is  no  public
      announcement  of  such  action  at  least  100  days  prior  to the  first
      anniversary of the date of mailing of the preceding year's annual meeting,
      a  stockholder's  notice  required  by this  Section  13(a)  shall also be
      considered timely, but only with respect to nominees for any new positions
      created by such increase, if it shall be delivered to the Secretary at the
      principal executive offices of the Corporation not later than the close of
      business  on the  tenth  day  following  the  day  on  which  such  public
      announcement is first made by the Corporation.

      (b)  Special  Meetings  of  Stockholders.  Only  such  business  shall  be
conducted at a special meeting of stockholders as shall have been brought before
the meeting  pursuant to the  Corporation's  notice of meeting.  Nominations  of
persons for election to the Board of Directors may be made at a special  meeting
of  stockholders  at which  directors  are to be  elected  (i)  pursuant  to the
Corporation's  notice of meeting,  (ii) by or at the  direction  of the Board of
Directors or (iii)  provided  that the Board of Directors  has  determined  that
directors  shall be elected at such special  meeting,  by any stockholder of the
Corporation  who is a stockholder of record both at the time of giving of notice
provided for in this Section 13 and at the time of the special  meeting,  who is
entitled to vote at the meeting and who complied with the notice  procedures set
forth in this Section 13. In the event the  Corporation  calls a special meeting
of  stockholders  for the purpose of electing one or more directors to the Board
of Directors, any such stockholder may nominate a person or persons (as the case
may be) for election as a director as specified in the  Corporation's  notice of
meeting,  if the  stockholder's  notice  required  by  paragraph  (a)(2) of this
Section  13 shall be  delivered  to the  Secretary  at the  principal  executive
offices of the  Corporation not earlier than the 120th day prior to such special
meeting  and not later than the close of  business  on the later of the 90th day
prior to such special meeting or the tenth day following the day on which public
announcement  is  first  made of the  date  of the  special  meeting  and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event  shall the public  announcement  of a  postponement  or  adjournment  of a
special  meeting  commence a new time  period for the giving of a  stockholder's
notice as described above.

      (c) General.  (1) Only such persons who are nominated in  accordance  with
the procedures set forth in this Section 13 and Article III,  Section 3 of these
Bylaws shall be eligible to serve as directors and only such  business  shall be
conducted at a meeting of  stockholders  as shall have been  brought  before the
meeting in  accordance  with the  procedures  set forth in this  Section 13. The
chairman of the  meeting  shall have the power and duty to  determine  whether a
nomination or any business proposed to be brought before the meeting was made or
proposed,  as the case may be, in accordance  with the  procedures  set forth in
this Section 13 and, if any proposed nomination or business is not in compliance
with this Section 13, to declare that such  defective  nomination or proposal be
disregarded.

            (2) For purposes of this Section 13, (a) the "date of mailing of the
      notice" shall mean the date of the proxy statement for the solicitation of
      proxies for election of directors and (b) "public announcement" shall mean
      disclosure (i) in a press release  reported by the Dow Jones News Service,
      Associated Press or comparable news service or (ii) in a document publicly
      filed by the  Corporation  with the  Securities  and  Exchange  Commission
      pursuant to the Exchange Act or the Investment Company Act.


                                      B-2


            (3) Notwithstanding  the foregoing  provisions of this Section 13, a
      stockholder  shall also comply with all applicable  requirements  of state
      law and of the Exchange Act and the  Investment  Company Act and the rules
      and  regulations  thereunder with respect to the matters set forth in this
      Section 13. Nothing in this Section 13 shall be deemed to affect any right
      of stockholders to request inclusion of proposals in, nor the right of the
      Corporation  to omit a proposal from, the  Corporation's  proxy  statement
      pursuant to Rule 14a-8 (or any  successor  provision)  under the  Exchange
      Act.

ARTICLE III

      Section  3.  Qualifications.  Directors  need  not be  stockholders.  Each
Director  shall hold office until the earlier of: (a) the expiration of his term
and his or her successor  shall have been elected and qualifies,  (b) his or her
death, (c) his or her resignation, or (d) his or her removal. To be eligible for
nomination as a director a person must, at the time of such person's nomination,
(a) have Relevant  Experience and Country Knowledge (as defined below),  (b) not
have any Conflict of Interest (as defined below) and (c) not be over 72 years of
age;  provided  that clause (c) shall not apply to any person who was a Director
on October 15, 1999 or to any person whom the  Nominating  Committee  (or in the
absence of such a Committee,  the Board of Directors)  determines to except from
that clause on the basis that the person's prior public or government service or
other  broad-based  activities in the business  community make it essential that
the  Corporation  continue to receive the benefit of the person's  services as a
Director. The determination  described in the previous sentence shall be made on
or before the time of  nomination.  Whether a  proposed  nominee  satisfies  the
foregoing  qualifications shall be determined by the Nominating Committee or, in
the absence of such a  Committee,  by the Board of  Directors,  each in its sole
discretion.

      For  purposes of the  following  definitions  of Relevant  Experience  and
Country Knowledge and Conflict of Interest,  the term "Specified  Country" means
any one or more of the following countries:  the Austrian Republic,  the Kingdom
of Belgium, the Republic of Finland,  the French Republic,  the Federal Republic
of Germany,  the Hellenic  Republic  ("Greece"),  the  Republic of Ireland,  the
Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands,
the  Portuguese  Republic  and the  Kingdom of Spain,  and any other  country in
Europe that has adopted the Euro as its currency.

      "Relevant  Experience and Country Knowledge" means experience in business,
investment,  economic or political  matters of a Specified Country or the United
States,  through  service  for 10 of the past 20 years  (except  where a shorter
period is noted) in one or more of the following principal occupations:

      (1)   senior  executive  officer or partner of a financial  or  industrial
            business  headquartered  in a Specified  Country and that has annual
            revenues of at least the equivalent of US $500 million,

      (2)   senior  executive  officer or partner of a financial  or  industrial
            business headquartered in the United States that has annual revenues
            of at least the  equivalent of US $500 million and whose  management
            responsibilities  include  supervision  of business  operations in a
            Specified Country or other European country,

      (3)   director  (or the  equivalent)  for 5 of the past 10 years of one or
            more investment  businesses or vehicles (including this Corporation)
            a principal  focus of which is investment  in one or more  Specified
            Countries  and that have at least the  equivalent of US $250 million
            in combined total assets of their own,

      (4)   senior  executive  officer or partner  of an  investment  management
            business  having  at least  the  equivalent  of US $500  million  in
            securities  of  companies  in  one or  more  Specified  Counties  or
            securities  principally  traded in one or more  Specified  Countries
            under discretionary management for others,


                                      B-3


      (5)   senior  executive  officer  or  partner  of a  business  consulting,
            accounting or law firm having at least 100  professionals  and whose
            principal  responsibility  involves or involved  providing  services
            involving  matters relating to a Specified Country or other European
            country  for   financial  or   industrial   businesses,   investment
            businesses  or  vehicles  or  investment  management  businesses  as
            described in (1) - (4) above,

      (6)   senior  official  (including  ambassador  or  minister)  (i)  in the
            national  government,  a government  agency or the central bank of a
            Specified   Country   or  the  United   States,   (ii)  in  a  major
            supranational agency or organization of which a Specified Country or
            the United States is a member,  or (iii) in a leading  international
            trade  organization  relating to a  Specified  Country or the United
            States,  in each case in the area of  finance,  economics,  trade or
            foreign relations, or

      (7)   current  director  or  senior  officer  (without  regard to years of
            service) of an investment manager or adviser of the Corporation,  or
            of any entity controlling or under common control with an investment
            manager or adviser of the Corporation.

For purposes of clauses (1)-(5) of the preceding sentence and clauses (1)-(2) of
the next  paragraph,  the term  "financial  or industrial  business"  includes a
financial  or  industrial  business  unit within a larger  enterprise;  the term
"investment  businesses  or vehicles"  includes an  investment  business unit or
investment vehicle within a larger enterprise;  the term "investment  management
business"  includes  an  investment  management  business  unit  within a larger
enterprise;  and the term "investment  vehicle"  includes an investment  vehicle
within  a  larger  enterprise;  but in each  case  only to the  extent  the unit
satisfies the revenue,  asset and other requirements  specified for the business
or vehicle in clauses  (1)-(5) of the preceding  sentence or clauses  (1)-(2) of
the next paragraph.

      "Conflict of Interest" means the presence of a conflict with the interests
of the Corporation or its operations through any of the following:

      (1)   current position (a) as a director,  officer, partner or employee of
            another investment vehicle a significant (i.e., 25% or more of total
            assets)  focus of which is  securities  of  companies in one or more
            Specified  Countries or securities  principally traded in markets of
            one or more  Specified  Countries  and  that  does not have the same
            investment  adviser  as the  Corporation  or an  investment  adviser
            affiliated with an investment  adviser of the  Corporation,  and (b)
            having  direct  and  regular   responsibilities   relating  to  that
            investment vehicle,

      (2)   current position as (a) a director,  officer, partner or employee of
            the sponsor (or  equivalent) of an investment  vehicle  described in
            the   previous   point   and   (b)   having   direct   and   regular
            responsibilities relating to that investment vehicle, or

      (3)   current  position  as  an  official  of  a  governmental  agency  or
            self-regulatory  body  having   responsibility  for  regulating  the
            Corporation or the markets in which it proposes to invest.


                                      B-4


                 TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
--------------------------------------------------------------------------------

                                      PROXY

                         THE EUROPEAN EQUITY FUND, INC.

          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The  undersigned  stockholder  of The  European  Equity  Fund,  Inc., a Maryland
corporation  (the  "Fund"),  hereby  appoints  John  Millette,   Patricia  Rosch
Carrington  and Elisa Metzger,  or any of them, as proxies for the  undersigned,
with full power of substitution in each of them, to attend the Annual Meeting of
the Stockholders of the Fund to be held at 2:00 p.m., New York time, on June 20,
2006 at the offices of Deutsche Bank, 345 Park Avenue, New York, New York 10154,
and  any  adjournment  or  postponement  thereof,  to  cast  on  behalf  of  the
undersigned  all votes that the undersigned is entitled to cast at such meeting,
and  otherwise  to  represent  the  undersigned  at the meeting  with all powers
possessed  by  the  undersigned  if  personally  present  at  the  meeting.  The
undersigned hereby  acknowledges  receipt of the Notice of the Annual Meeting of
Stockholders and of the accompanying Proxy Statement, the terms of each of which
are  incorporated by reference  herein,  and revokes any proxy  heretofore given
with respect to such meeting.

THE VOTES  ENTITLED  TO BE CAST BY THE  UNDERSIGNED  WILL BE CAST AS  INSTRUCTED
BELOW. IF THIS PROXY IS EXECUTED BUT NO INSTRUCTION IS GIVEN, THE VOTES ENTITLED
TO BE  CAST BY THE  UNDERSIGNED  WILL BE CAST  "FOR"  EACH OF THE  NOMINEES  FOR
DIRECTOR AND "FOR"  PROPOSAL 2, AS DESCRIBED IN THE PROXY  STATEMENT  AND IN THE
DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.

              CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE

----------------                                                ----------------
SEE REVERSE SIDE                                                SEE REVERSE SIDE
----------------                                                ----------------


                 TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
--------------------------------------------------------------------------------
|X| Please mark
    votes as in
    this example.

--------------------------------------------------------------------------------
  THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES AND
                               "FOR" PROPOSAL 2.
--------------------------------------------------------------------------------

1.    Election of Directors.    FOR each of       WITHHOLD           FOR all
                               the nominees       AUTHORITY      nominees except
        Dr. Kurt W. Bock       for director       as to all       as marked to
        Mr. Detlef Bierbaum       listed       listed nominees    the contrary
        Mr. John H. Cannon         |_|              |_|               |_|
        Dr. Frank Tromel

      (Instructions:  To withhold authority for any individual nominee, strike a
      line through the nominee's name in the list above.)

2.    To  ratify  the  appointment  by the  Audit  Committee  and the  Board  of
      Directors of PricewaterhouseCoopers  LLP, an independent public accounting
      firm,  as  independent  auditors  for the fiscal year ending  December 31,
      2006.

3.    To vote and otherwise  represent the  undersigned on any other matter that
      may properly come before the meeting or any  adjournment  or  postponement
      thereof in the discretion of the Proxy holder.

                     FOR         AGAINST          ABSTAIN
                     |_|           |_|              |_|

                                   Date __________________________________ ,2006

                                   _____________________________________________
                                   Signature

                                   _____________________________________________
                                   Signature, if held jointly

                                   Please sign here exactly as your name appears
                                   in the  records of the Fund and date.  If the
                                   shares are held  jointly,  each holder should
                                   sign. When signing as an attorney,  executor,
                                   administrator,  trustee, guardian, officer of
                                   a corporation or other entity or in any other
                                   representative capacity, please give the full
                                   title under signature(s).