Boards of Scudder New Europe Fund, Inc. and Kemper Europe Fund Announce Proposed Transactions.

NEW YORK--(BUSINESS WIRE)--January 27, 1999--The Boards of Scudder New Europe Fund, Inc. ("Scudder New Europe"; NYSE Ticker Symbol: NEF) and Kemper Europe Fund ("Kemper Europe") announced today their approval in principle of actions that are expected to result in the creation of a single open-end investment company (a mutual fund) that will invest in primarily European equity securities.

The Board of Directors of Scudder New Europe has agreed in principle to recommend to shareholders that the fund be converted to an open-end investment company. Since the inception of the fund, the Board has periodically reviewed the closed-end structure of Scudder New Europe, including the potential investment benefits of the closed-end structure and its potential disadvantages as reflected in periodic discounts in the market price of the fund's shares from net asset value, and has considered various alternatives for addressing the trading discount. As a result of significant developments in European markets in recent years, the Board has determined that the proposed conversion to open-end status, which is designed to allow shareholders to realize net asset value for their investments in Scudder New Europe, is in the best interests of all of its shareholders at this time.

In reaching this decision, Scudder New Europe's Board took into account, among other things, changes in the European markets for investments by this fund which facilitate its operation as an open-end investment company. The Board has been advised by Scudder New Europe's investment adviser, Scudder Kemper Investments, Inc., as part of the ongoing review of market developments described above, that the increased liquidity of portfolio investments in the fund, the introduction of the Euro as a common currency in 11 countries, and the relative opportunities for investing in highly liquid European securities, will permit Scudder New Europe to operate efficiently and in the best interests of its shareholders as an open-end fund.

The Board of Trustees of Kemper Europe has agreed in principle to propose to shareholders that they approve reorganization of Kemper Europe into the newly open-ended Scudder New Europe, which had a one year market return of 36.13% and a one year net asset value return of 34.39% for the period ended December 31, 1998. Upon completion of these actions, Scudder New Europe expects to change its name to Kemper Europe Fund (the "Fund"), and commence operations as an open-end fund. The Fund will be managed by a portfolio management team consisting of Carol L. Franklin, lead portfolio manager (the current Scudder New Europe lead portfolio manager), Joan R. Gregory, and Marc J. Slendebroek (the current Kemper Europe lead portfolio manager). The Fund will be distributed through financial intermediaries as part of the Kemper family of funds.

Following the conversion to open-end status, Scudder New Europe shares acquired while the fund was closed-end would be redeemable at net asset value subject to a redemption fee (currently expected to be equal to 2% of the amount redeemed) during the first year after the conversion to open-end status. In addition, redemptions of these shares during this period by a shareholder in excess of $250,000 would be paid in-kind at the discretion of the Fund. These first-year features should help to mitigate certain possible negative effects, including adverse tax consequences, on shareholders who elect to remain in the Fund.

These transactions are expected to be concluded during the third quarter of 1999 and are subject to the satisfaction of certain conditions including final approval by the board of each fund, the preparation and execution of an agreement and plan of reorganization between Scudder New Europe and Kemper Europe, the submission of documents to the Securities and Exchange Commission for review, and favorable votes by shareholders of each fund.

The investment adviser to Scudder New Europe and Kemper Europe is Scudder Kemper Investments, Inc., the global investment management business of Zurich Financial Services Group. Scudder Kemper Investments is one of the largest and most experienced investment management organizations in the world, managing more than $245 billion in assets for institutional and corporate clients, retirement and pension plans, insurance companies, mutual fund investors, and individuals. Scudder Kemper Investments offers a full range of investment counsel and asset management capabilities, based on a combination of proprietary research and disciplined, long-term investment strategies.

For investor information please call Judith Hannaway at [phone] and for media inquiries please call Eleanor Mascheroni at [phone].