UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
_______________________________
Investment Company Act file number 811-4632
The European Equity Fund, Inc.
(Exact name of registrant as specified in charter)
345 Park Avenue
New York, NY 10154
(Address of principal executive offices) (Zip code)
Paul Schubert
345 Park Avenue
New York, NY 10154-0004
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 454-7190
Date of fiscal year end: 12/31
Date of reporting period: 09/30/08
ITEM 1. SCHEDULE OF INVESTMENTS
THE EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30,
2008 (unaudited)
| Shares | Description | Value(a) | |||||||||
| INVESTMENTS IN
GERMAN SECURITIES - 31.0% |
|||||||||||
| CHEMICALS - 7.9% | |||||||||||
| 52,000 | BASF | $ | 2,465,073 | ||||||||
| 20,000 | K + S | 1,366,395 | |||||||||
| 33,000 | Linde | 3,498,634 | |||||||||
| 7,000 | Wacker Chemie | 986,661 | |||||||||
| 8,316,763 | |||||||||||
| CONSTRUCTION
& ENGINEERING - 0.8% |
|||||||||||
| 16,000 | Bauer | 797,813 | |||||||||
| DIVERSIFIED
FINANCIAL SERVICES - 1.3% |
|||||||||||
| 15,000 | Deutsche Boerse | 1,345,677 | |||||||||
| ELECTRIC UTILITIES - 5.0% | |||||||||||
| 104,000 | E.ON | 5,197,470 | |||||||||
| ELECTRICAL EQUIPMENT - 3.2% | |||||||||||
| 25,000 | SGL Carbon* | 957,937 | |||||||||
| 38,000 | Solarworld | 1,569,753 | |||||||||
| 10,000 | Vestas Wind Systems* | 848,829 | |||||||||
| 3,376,519 | |||||||||||
| INDUSTRIAL CONGLOMERATES - 3.5% |
|||||||||||
| 22,000 | Rheinmetall | 1,172,392 | |||||||||
| 27,500 | Siemens | 2,539,692 | |||||||||
| 3,712,084 | |||||||||||
| INSURANCE - 3.0% | |||||||||||
| 23,000 | Allianz | 3,110,403 | |||||||||
| INTERNET
SOFTWARE & SERVICES - 0.9% |
|||||||||||
| 85,000 | United Internet | 904,984 | |||||||||
| PHARMACEUTICALS - 2.1% | |||||||||||
| 30,000 | Bayer | 2,182,748 | |||||||||
| REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.5% | |||||||||||
| 57,000 | IVG Immobilien | 543,622 | |||||||||
| SOFTWARE - 1.2% | |||||||||||
| 22,000 | Software AG | 1,235,430 | |||||||||
| Total Common
Stocks (cost $34,927,059) |
30,723,513 | ||||||||||
| Shares | Description | Value(a) | |||||||||
| PREFERRED STOCK - 1.6% | |||||||||||
| HEALTHCARE
EQUIPMENT & SUPPLIES - 1.6% |
|||||||||||
| 24,000 | Fresenius (cost $783,786) |
$ | 1,725,635 | ||||||||
| Total Investments
in German Securities (cost $35,710,845) |
32,449,148 | ||||||||||
| INVESTMENTS IN
FRENCH COMMON STOCKS - 21.3% |
|||||||||||
| COMMERCIAL BANKS - 2.7% | |||||||||||
| 30,000 | BNP Paribas | 2,784,479 | |||||||||
| CONSTRUCTION MATERIALS - 1.0% |
|||||||||||
| 10,000 | Lafarge | 1,036,454 | |||||||||
| ELECTRICAL EQUIPMENT - 0.8% | |||||||||||
| 12,000 | Alstom | 889,365 | |||||||||
| ENERGY
EQUIPMENT & SERVICES - 0.9% |
|||||||||||
| 30,000 | Compagnie
Generale de Geophysique-Veritas* |
932,935 | |||||||||
| FOOD PRODUCTS - 3.3% | |||||||||||
| 50,000 | Groupe Danone | 3,511,500 | |||||||||
| INSURANCE - 5.2% | |||||||||||
| 170,100 | AXA | 5,470,130 | |||||||||
| MULTI-UTILITIES - 1.4% | |||||||||||
| 28,623 | Suez | 1,467,441 | |||||||||
| OIL, GAS &
CONSUMABLE FUELS - 4.1% |
|||||||||||
| 71,600 | Total | 4,282,244 | |||||||||
| TEXTILE,
APPAREL & LUXURY GOODS - 1.9% |
|||||||||||
| 23,000 | LVMH Moet
Hennessy Louis Vuitton |
1,994,883 | |||||||||
| Total Investments
in French Common Stocks (cost $25,435,736) |
22,369,431 | ||||||||||
7
| Shares | Description | Value(a) | |||||||||
| INVESTMENTS IN
SPANISH COMMON STOCKS - 12.6% |
|||||||||||
| BIOTECHNOLOGY - 1.2% | |||||||||||
| 51,000 | Grifols | $ | 1,289,423 | ||||||||
| CONSTRUCTION
& ENGINEERING - 1.0% |
|||||||||||
| 24,000 | Tecnicas Reunidas | 1,005,918 | |||||||||
| DIVERSIFIED TELECOMMUNICATION SERVICES - 5.8% |
|||||||||||
| 260,000 | Telefonica | 6,131,641 | |||||||||
| ELECTRIC UTILITIES - 2.4% | |||||||||||
| 250,000 | Iberdrola | 2,507,211 | |||||||||
| INDEPENDENT
POWER PRODUCERS & ENERGY TRADERS - 0.8% |
|||||||||||
| 200,000 | Iberdrola Renovables* | 859,615 | |||||||||
| IT SERVICES - 1.4% | |||||||||||
| 61,000 | Indra Sistemas | 1,437,721 | |||||||||
| Total Investments
in Spanish Common Stocks (cost $13,998,532) |
13,231,529 | ||||||||||
| INVESTMENTS IN
ITALIAN COMMON STOCKS - 7.6% |
|||||||||||
| COMMERCIAL BANKS - 3.8% | |||||||||||
| 730,000 | Intesa Sanpaolo | 3,942,501 | |||||||||
| CONSTRUCTION
& ENGINEERING - 0.9% |
|||||||||||
| 60,000 | Trevi Finanziaria | 975,916 | |||||||||
| ENERGY
EQUIPMENT & SERVICES - 0.8% |
|||||||||||
| 30,000 | Saipem | 881,106 | |||||||||
| MULTI-UTILITIES - 2.1% | |||||||||||
| 600,000 | UniCredito Italiano SpA | 2,189,069 | |||||||||
| Total Investments
in Italian Common Stocks (cost $12,518,779) |
7,988,592 | ||||||||||
| Shares | Description | Value(a) | |||||||||
| INVESTMENTS IN
DUTCH COMMON STOCKS - 5.7% |
|||||||||||
| CONSTRUCTION
& ENGINEERING - 2.4% |
|||||||||||
| 27,000 | Boskalis Westminster | $ | 1,257,567 | ||||||||
| 38,000 | Grontmij | 1,238,295 | |||||||||
| 2,495,862 | |||||||||||
| ENERGY
EQUIPMENT & SERVICES - 1.3% |
|||||||||||
| 23,000 | Fugro | 1,339,075 | |||||||||
| INSURANCE - 2.0% | |||||||||||
| 250,000 | Aegon | 2,177,130 | |||||||||
| Total Investments
in Dutch Common Stocks (cost $7,949,032) |
6,012,067 | ||||||||||
| INVESTMENTS IN
SWISS COMMON STOCKS - 4.9% |
|||||||||||
| CAPITAL MARKETS - 2.1% | |||||||||||
| 135,000 | UBS AG* | 2,222,708 | |||||||||
| INSURANCE - 1.0% | |||||||||||
| 20,000 | Swiss Reinsurance | 1,082,768 | |||||||||
| LIFE SCIENCES
TOOLS & SERVICES - 1.8% |
|||||||||||
| 15,000 | Lonza Group | 1,867,642 | |||||||||
| Total Investments
in Swiss Common Stocks (cost $5,640,560) |
5,173,118 | ||||||||||
| INVESTMENTS IN
GREEK COMMON STOCKS - 4.0% |
|||||||||||
| COMMERCIAL BANKS - 4.0% | |||||||||||
| 145,000 | Bank of Cyprus, Ltd. | 1,124,242 | |||||||||
| 70,176 | EFG Eurobank | 1,251,829 | |||||||||
| 46,800 | National Bank of Greece | 1,840,588 | |||||||||
| 4,216,659 | |||||||||||
| Total Investments
in Greek Common Stocks (cost $6,196,650) |
4,216,659 | ||||||||||
8
| Shares | Description | Value(a) | |||||||||
| INVESTMENTS IN
FINNISH COMMON STOCKS - 3.2% |
|||||||||||
| AUTO COMPONENTS - 0.7% | |||||||||||
| 33,000 | Nokian Renkaat | 78,710 | |||||||||
| ELECTRIC UTILITIES - 2.5% | |||||||||||
| 78,000 | Fortum | 2,583,397 | |||||||||
| Total Investments
in Finnish Common Stocks (cost $4,239,212) |
3,362,107 | ||||||||||
| INVESTMENTS IN
AUSTRIAN COMMON STOCKS - 2.3% |
|||||||||||
| DIVERSIFIED TELECOMMUNICATION SERVICES - 1.5% |
|||||||||||
| 90,000 | Telekom Austria | 1,566,269 | |||||||||
| TRANSPORTATION INFRASTRUCTURE - 0.8% |
|||||||||||
| 13,000 | Flughafen Wien | 811,831 | |||||||||
| Total Investments
in Austrian Common Stocks (cost $4,054,731) |
2,378,100 | ||||||||||
| INVESTMENTS IN
NORWEGIAN COMMON STOCKS - 1.6% |
|||||||||||
| COMMERCIAL BANKS - 0.7% | |||||||||||
| 100,000 | DnB NOR | 750,786 | |||||||||
| ENERGY
EQUIPMENT & SERVICES - 0.9% |
|||||||||||
| 60,000 | Aker Solutions ASA | 947,614 | |||||||||
| Total Investments
in Norwegian Common Stocks (cost $3,128,549) |
1,698,400 | ||||||||||
| Shares | Description | Value(a) | |||||||||
| INVESTMENTS IN
PORTUGUESE COMMON STOCKS - 1.6% |
|||||||||||
| OIL, GAS &
CONSUMABLE FUELS - 1.6% |
|||||||||||
| 100,000 | Galp
Energia (cost $2,304,198) |
1,634,954 | |||||||||
| Total Investments
in Common and Preferred Stocks - 95.8% (cost $121,176,824) |
100,514,105 | ||||||||||
| CASH EQUIVALENTS - 0.0% | |||||||||||
| 8,820 | Cash Management
QP Trust, 2.38%(b) (cost $8,820) |
8,820 | |||||||||
| Total Investments
- 95.8% (cost $121,185,644) |
100,522,925 | ||||||||||
| Other Assets and
Liabilities, Net - 4.2% |
4,377,315 | ||||||||||
| NET ASSETS - 100.0% | $ | 104,900,240 | |||||||||
* Non-income producing security.
(a) Values stated in US dollars.
(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.
9
Fair Value Measurements
The following is a summary of the inputs used as of September 30, 2008 in valuing the Fund's investments. Please see below for information on the Fund's policy regarding valuation inputs, and their aggregate levels used in the table below:
| Valuation Inputs | Investments in
Securities |
||||||
| Level 1 | $ | 100,522,925 | |||||
| Level 2 | - | ||||||
| Level 3 | - | ||||||
| Total | $ | 100,522,925 | |||||
The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), effective at the beginning of the Fund's fiscal year. FAS 157 establishes a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and requires additional disclosure about the classification of fair value measurements.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
10
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ITEM 2. |
CONTROLS AND PROCEDURES |
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(a) The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. |
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(b) There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting. |
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ITEM 3. |
EXHIBITS |
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Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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By: |
/s/Michael G. Clark |
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Michael G. Clark |
President
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Date: |
November 14, 2008 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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By: |
/s/Michael G. Clark |
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Michael G. Clark |
President
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Date: |
November 14, 2008 |
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By: |
/s/Paul Schubert |
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Paul Schubert |
Chief Financial Officer and Treasurer
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Date: |
November 14, 2008 |