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
                               (Amendment No. 1)

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 CENTRAL 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 CENTRAL EUROPEAN EQUITY FUND, INC.
                                345 PARK AVENUE,
                            NEW YORK, NEW YORK 10154

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                                  JUNE 24, 2003

--------------------------------------------------------------------------------

To our Stockholders:

         Notice is hereby given that the Annual Meeting of Stockholders of The
Central European Equity Fund, Inc., a Maryland corporation (the "Fund"), will be
held at 3:30 P.M., New York time, on June 24, 2003 at the offices of Deutsche
Bank Securities Inc., 31 West 52nd Street, Fifth Floor Auditorium, New York, New
York 10019 for the following purposes:

     1.   To elect four (4) Directors, three to serve for terms of three years
          and one to serve for a term of two years, and until their successors
          are elected and qualify.

     2.   To ratify the appointment by the Board of Directors of
          PricewaterhouseCoopers LLP as independent accountants for the fiscal
          year ending October 31, 2003.

     3.   To amend the Fund's investment policies to permit increased
          flexibility in the geographic distribution of the Fund's investments
          by increasing the Fund's ability to invest in Russian securities.

     4.   To amend the Fund's investment policies to eliminate the per-issuer
          investment limit.

     5.   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
2, 2003 are entitled to notice of, and to vote at, this Meeting or any
adjournment thereof.

         If you have any questions or need additional information, please
contact Morrow & Co., Inc., the Fund's proxy solicitors, at 445 Park Avenue, New
York, New York 10022, or 1-800-662-5200.

                                       By Order of the Board of Directors

                                       Robert R. Gambee
                                       Chief Operating Officer
                                       and Secretary

Dated: May 13, 2003

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






                     THE CENTRAL EUROPEAN EQUITY FUND, INC.
                                345 PARK AVENUE,
                            NEW YORK, NEW YORK 10154

                         ANNUAL MEETING OF STOCKHOLDERS
                                  JUNE 24, 2003

--------------------------------------------------------------------------------
                                 PROXY STATEMENT
--------------------------------------------------------------------------------


         This Proxy  Statement  is  furnished  by the Board of  Directors of The
Central  European  Equity 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 3:30 P.M.,  New York time,  on June 24, 2003 at the offices of Deutsche  Bank
Securities Inc., 31 West 52nd Street, Fifth Floor Auditorium, New York, New York
10019. 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  form of proxy is executed  properly and returned,
shares  represented  by it will be voted at the Meeting in  accordance  with the
instructions on the proxy.  However,  if no instructions  are specified,  shares
will be voted FOR the election of four (4)  directors of the Fund  ("Directors")
(Proposal  1),  FOR  the  ratification  of  the  appointment  by  the  Board  of
PricewaterhouseCoopers LLP as independent accountants for the Fund (Proposal 2),
FOR the change of  investment  policies to allow  greater  investment  in Russia
(Proposal  3),  and FOR  the  elimination  of the  per-issuer  investment  limit
(Proposal  4). A proxy may be  revoked at any time prior to the time it is voted
by written  notice to the Secretary of the Fund or by submitting a  subsequently
executed proxy or by attendance at the Meeting and voting in person.

         The close of  business on May 2, 2003 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 7,850,363 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 will first be mailed to stockholders
on or about May 13, 2003.

         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.  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 III expires at the 2003 Annual Meeting, Class I at the next
succeeding annual meeting and Class II at the following succeeding annual
meeting. Three Class III nominees and one Class II nominee are proposed in this
Proxy Statement for election.

         Should any vacancy occur on the Board of Directors, the remaining
Directors would be able to fill such 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 to vote each proxy for the election of the
nominees listed below. Each nominee has indicated that he will 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 in accordance with their discretion.

INFORMATION REGARDING DIRECTORS AND OFFICERS

         The following table shows 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. Each has served as a Director
of the Fund since the Fund's inception in 1990, except for Ambassador Burt, who
was elected to the Board on June 30, 2000, and Messrs. Langhammer and Voscherau,
who were elected on May 9, 2003.

NOMINEES PROPOSED FOR ELECTION:



                                               CLASS III DIRECTORS
                         (TERM WILL EXPIRE IN 2003; NOMINEES FOR TERM EXPIRING IN 2006)
-----------------------------------------------------------------------------------------------------------------------------
                                                                        NUMBER OF
                                                                        PORTFOLIOS                                  SHARES
                                                                         IN FUND                                  OF COMMON
                             TERM OF                                     COMPLEX(2)                                 STOCK
                            OFFICE AND                                 OVERSEEN BY                                BENEFICIALLY
    NAME,      POSITION(S)  LENGTH OF             PRINCIPAL            DIRECTOR OR    OTHER DIRECTORSHIPS HELD     OWNED AT
 ADDRESS(1) &     WITH         TIME             OCCUPATION(S)          NOMINEE FOR   BY DIRECTOR OR NOMINEE FOR     MAY 1,
     AGE          FUND        SERVED        DURING PAST FIVE YEARS       DIRECTOR             DIRECTOR              2003(3)
-----------------------------------------------------------------------------------------------------------------------------

                                            NON-INTERESTED DIRECTORS
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Fred H.        Director    Since 2003    Chief Executive Officer,           2        Director, The Germany          None.
Langhammer,                              The Estee Lauder Companies                  Fund, Inc. (since 2003).(5)
58(9)                                    Inc. (manufacturer and                      Director, Gillette
                                         marketer of cosmetics)                      Company.  Director,
                                         (since 2000), President                     Inditex, S.A (fashion
                                         (since 1995),  Chief                        manufacturer and
                                         Operating Officer                           retailer).  Director,
                                         (1985-1999), Managing                       Cosmetics, Toiletries and
                                         Director, operations in                     Fragrance Association.
                                         Germany (1982-1985),                        Director, German-American
                                         President, operations in                    Chamber of Commerce, Inc.
                                         Japan (1975-1982).                          Chairman, American
                                                                                     Institute for Contemporary
                                                                                     German Studies at Johns
                                                                                     Hopkins University.
                                                                                     Senior Fellow, Foreign
                                                                                     Policy Association.
                                                                                     Director, Japan Society.


                                        2




                                               CLASS III DIRECTORS
                         (TERM WILL EXPIRE IN 2003; NOMINEES FOR TERM EXPIRING IN 2006)
-----------------------------------------------------------------------------------------------------------------------------
                                                                        NUMBER OF
                                                                        PORTFOLIOS                                  SHARES
                                                                         IN FUND                                  OF COMMON
                             TERM OF                                     COMPLEX(2)                                 STOCK
                            OFFICE AND                                 OVERSEEN BY                                BENEFICIALLY
    NAME,      POSITION(S)  LENGTH OF             PRINCIPAL            DIRECTOR OR    OTHER DIRECTORSHIPS HELD     OWNED AT
 ADDRESS(1) &     WITH         TIME             OCCUPATION(S)          NOMINEE FOR   BY DIRECTOR OR NOMINEE FOR     MAY 1,
     AGE          FUND        SERVED        DURING PAST FIVE YEARS       DIRECTOR             DIRECTOR              2003(3)
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Werner         Director    Since 1990.   President and Chief                2        Director, The Germany          1,070
Walbrol, 65                              Executive Officer, The                      Fund, Inc. (since 1986).(5)
                                         German American Chamber of                  Director, TUV Rheinland of
                                         Commerce, Inc.  President                   North America, Inc.
                                         and Chief Executive                         (independent testing and
                                         Officer, The European                       assessment services).
                                         American Chamber of                         President and Director,
                                         Commerce, Inc.                              German-American
                                                                                     Partnership Program
                                                                                     (student exchange
                                                                                     programs).  Director, AXA
                                                                                     Nordstern Art Insurance
                                                                                     Corporation (fine art and
                                                                                     collectible insurer).
                                                                                     Member,  Advisory Board,
                                                                                     Abels & Grey.
-----------------------------------------------------------------------------------------------------------------------------

                                              INTERESTED DIRECTOR(4)
-----------------------------------------------------------------------------------------------------------------------------
Christian H.   Director    Since 1990.   Director (since 1999) and          3        Director, The Germany          1,100
Strenger, 59                             Managing Director                           Fund, Inc. (since 1986)
                                         (1991-1999) of DWS                          and The New Germany
                                         Investment GmbH (investment                 Fund, Inc. (since 1990).(5)
                                         management).                                Member, Supervisory Board,
                                                                                     Fraport AG (international
                                                                                     airport business).  Member,
                                                                                     Supervisory Board, Metro
                                                                                     AG (international trading
                                                                                     company).  Board member,
                                                                                     Incepta PLC (media and
                                                                                     advertising).
-----------------------------------------------------------------------------------------------------------------------------




-----------------------------------------------------------------------------------------------------------------------------
                                                CLASS II DIRECTOR
                                       (NOMINEE FOR TERM EXPIRING IN 2005)
-----------------------------------------------------------------------------------------------------------------------------
                                                                        NUMBER OF
                                                                        PORTFOLIOS                                  SHARES
                                                                         IN FUND                                  OF COMMON
                             TERM OF                                     COMPLEX(2)                                 STOCK
                            OFFICE AND                                 OVERSEEN BY                                BENEFICIALLY
    NAME,      POSITION(S)  LENGTH OF             PRINCIPAL            DIRECTOR OR    OTHER DIRECTORSHIPS HELD     OWNED AT
 ADDRESS(1) &     WITH         TIME             OCCUPATION(S)          NOMINEE FOR   BY DIRECTOR OR NOMINEE FOR     MAY 1,
     AGE          FUND        SERVED        DURING PAST FIVE YEARS       DIRECTOR             DIRECTOR              2003(3)
-----------------------------------------------------------------------------------------------------------------------------

                                             NON-INTERESTED DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Eggert         Director    Since 2003    Vice Chairman, BASF                2        Director The Germany Fund      None.
Voscherau,(6)                            Aktiengesellschaft                          Inc. (since 2003).(5)
60                                       (chemicals) (since 2002).                   Member, Supervisory Boards
                                         Deputy Chairman, Ressort II                 of: Dresdner Bank
                                         (Europe Region)                             Lateinamerika AG,
                                         (Industrials) (1998-2002).                  Haftpflichtverband der
                                         Chairman and Chief                          Deutschen Industrie
                                         Executive Officer and                       V.a.G., Basell N.V. , BASF
                                         Executive Director, BASF                    Espanola S.A.,  BASF
                                         Corporation (chemicals)                     Schwarzheide GmbH.
                                         (United States)                             President, Cefic (European
                                         (1997-1998).  Executive                     Chemical Industry
                                         Director, BASF                              Council).  President,
                                         Aktiengesellschaft                          International Council of
                                         (1996-1997), Executive Vice                 Chemical Associations.
                                         President, BASF Corporation                 Board Member, BASF
                                         (United States) and                         Aktiengesellschaft.
                                         President, North American
                                         Consumer Products division
                                         (1991-1994). President, BASF
                                         Aktiengesellschaft (Germany)
                                         (1986-1991).
-----------------------------------------------------------------------------------------------------------------------------


                                        3




DIRECTORS WHOSE TERM WILL CONTINUE:



                                                CLASS I DIRECTORS
                                           (TERM WILL EXPIRE IN 2004)
-----------------------------------------------------------------------------------------------------------------------------
                                                                        NUMBER OF
                                                                        PORTFOLIOS                                  SHARES
                                                                         IN FUND                                  OF COMMON
                             TERM OF                                     COMPLEX(2)                                 STOCK
                            OFFICE AND                                 OVERSEEN BY                                BENEFICIALLY
    NAME,      POSITION(S)  LENGTH OF             PRINCIPAL            DIRECTOR OR    OTHER DIRECTORSHIPS HELD     OWNED AT
 ADDRESS(1) &     WITH         TIME             OCCUPATION(S)          NOMINEE FOR   BY DIRECTOR OR NOMINEE FOR     MAY 1,
     AGE          FUND        SERVED        DURING PAST FIVE YEARS       DIRECTOR             DIRECTOR              2003(3)
-----------------------------------------------------------------------------------------------------------------------------

                                            NON-INTERESTED DIRECTORS
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Ambassador     Director    Since 2000.   Chairman, Diligence LLC,           68       Director, The Germany           450
Richard R.                               formerly IEP Advisors, Inc.                 Fund, Inc., as well as
Burt, 56                                 (information collection,                    other funds in the Fund
                                         analysis, consulting and                    Complex as indicated.(5)
                                         intelligence) (since                        Board Member, IGT, Inc.
                                         1998).   Chairman of the                    (gaming technology) (since
                                         Board, Weirton Steel Corp.                  1995).  Board Member,
                                         (since 1996).  Partner,                     Hollinger International
                                         McKinsey & Company                          (printing and publishing)
                                         (1991-1994).  U.S.                          (since 1995). Board
                                         Ambassador to the Federal                   Member, HCL Technologies,
                                         Republic of Germany                         Inc. (information
                                         (1985-1989). Chairman, IEP                  technology and product
                                         Advisor, LLP (international                 engineering) (since 1999).
                                         consulting).                                Member, Textron
                                                                                     Corporation International
                                                                                     Advisory Council (aviation,
                                                                                     automotive, industrial
                                                                                     operations and finance)
                                                                                     (since 1996). Director,
                                                                                     UBS-Paine Webber family of
                                                                                     Mutual Funds.
-----------------------------------------------------------------------------------------------------------------------------
Edward C.      Director    Since 1990.   Consultant (since 1994).           2        Director, The Germany          1,484
Schmults, 72                             Senior Vice President -                     Fund, Inc. (since 1986).(5)
                                         External Affairs and                        Board Member, Green Point
                                         General Counsel, GTE                        Financial Corp. (since
                                         Corporation                                 1994).
                                         (telecommunications)
                                         (1984-1994); Deputy Attorney
                                         General of the U.S. Department
                                         of Justice (1981-1984);
-----------------------------------------------------------------------------------------------------------------------------

                                              INTERESTED DIRECTOR(4)
-----------------------------------------------------------------------------------------------------------------------------
Detlef         Director    Since 1990.   Partner of Sal. Oppenheim          2        Director, The Germany          None.
Bierbaum, 60                             Jr. & Cie KGaA (investment                  Fund, Inc. (since 1986).(5)
                                         management).                                Member, Supervisory Board,
                                                                                     ESCADA  Aktiengesellschaft
                                                                                     (women's apparel).  Member
                                                                                     of the Supervisory Board,
                                                                                     Tertia Handelsbeteiligungs-
                                                                                     gesellschaft mbH (electronic
                                                                                     retailor).  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.
-----------------------------------------------------------------------------------------------------------------------------


                                        4





                                               CLASS II DIRECTORS
                                             (TERM WILL EXPIRE 2005)
-----------------------------------------------------------------------------------------------------------------------------
                                                                        NUMBER OF
                                                                        PORTFOLIOS                                  SHARES
                                                                         IN FUND                                  OF COMMON
                             TERM OF                                    COMPLEX(2)                                  STOCK
                            OFFICE AND                                 OVERSEEN BY                                BENEFICIALLY
    NAME,      POSITION(S)  LENGTH OF             PRINCIPAL            DIRECTOR OR    OTHER DIRECTORSHIPS HELD     OWNED AT
 ADDRESS(1) &     WITH         TIME             OCCUPATION(S)          NOMINEE FOR   BY DIRECTOR OR NOMINEE FOR     MAY 1,
     AGE          FUND        SERVED        DURING PAST FIVE YEARS       DIRECTOR             DIRECTOR              2003(3)
-----------------------------------------------------------------------------------------------------------------------------

                                            NON-INTERESTED DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Robert H.      Director    Since 1990.   President, Robert H.               69       Director, The Germany          2,539
Wadsworth, 63                            Wadsworth Associates, Inc.                  Fund, Inc. (since 1986)
                                         (mutual fund consulting)                    and The New Germany Fund,
                                         (since 1982).  President                    Inc. (since 1992) as well
                                         and Trustee, Trust for                      as other funds in the Fund
                                         Investment Managers                         Complex as indicated.(5)
                                         (1999-2002). President,
                                         Investment Company
                                         Administration, L.L.C.
                                         (1992-2001). President,
                                         Treasurer and Director, First
                                         Fund Distributors, Inc. (mutual
                                         fund distribution) (1990-2002).
                                         Vice President, Professionally
                                         Managed Portfolios (1991-2002).
                                         Vice President, Advisors Series
                                         Trust (registered investment
                                         companies) (1997-2002).
                                         President, Guinness Flight
                                         Investment Funds, Inc.
                                         (registered investment
                                         companies) (1994-1998).
-----------------------------------------------------------------------------------------------------------------------------

                                              INTERESTED DIRECTOR(4)
-----------------------------------------------------------------------------------------------------------------------------
John Bult, 66    Director    Since       Chairman, PaineWebber              3        Director, The Germany          3,351
                             1990.       International (since 1985).                 Fund, Inc. (since 1986)
                                                                                     and The New Germany Fund,
                                                                                     Inc. (since 1990).(5)
                                                                                     Director, The France
                                                                                     Growth Fund, Inc. (closed
                                                                                     end  fund). Director, The
                                                                                     Greater China Fund, Inc.
                                                                                     (closed end fund).
-----------------------------------------------------------------------------------------------------------------------------


EXECUTIVE OFFICERS(7):



                                                                                                                   SHARES
                               TERM OF                                                                           OF COMMON
                              OFFICE AND                                                                           STOCK
                 POSITION(S)  LENGTH OF                                 PRINCIPAL                               BENEFICIALLY
 NAME, ADDRESS      WITH         TIME                                 OCCUPATION(S)                               OWNED AT
     & AGE          FUND        SERVED                           DURING PAST FIVE YEARS                         MAY 1, 2003(3)
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Richard T.       President   Year to       Trustee and/or President of each of the investment companies             1,250
Hale, 57         and Chief   year since    advised by Deutsche Asset Management, Inc. or its affiliates.
                 Executive   2001.         Managing Director, Deutsche Asset Management Americas.  Managing
                 Officer                   Director, Deutsche Bank Securities Inc., formerly Deutsche Banc
                                           Alex Brown Inc.  Director and President, Investment Company
                                           Capital Corp. (registered investment advisor).
-----------------------------------------------------------------------------------------------------------------------------
Hanspeter        Chief       Year to       President of Deutsche Bank Investment Management Inc.  Managing          4000
Ackermann,       Investment  year since    Director, Deutsche Bank Securities Inc.  Managing Director and
46(8)            Officer     1996.         Senior International Equity Portfolio Manager, Bankers Trust Co.
                                           CIO, The Germany Fund, Inc. and The New Germany Fund, Inc.
                                           President and Managing Partner, Eiger Asset Management
                                           (1993-1996), Managing Director and CIO, SBC Brinson, formerly SBC
                                           Portfolio Management International Inc. (institutional investment
                                           management) (1983-1993).
-----------------------------------------------------------------------------------------------------------------------------
Robert R.        Chief       Year to       Director (since 1992), First Vice President (1987-1991) and Vice          500
Gambee, 60(8)    Operating   year since    President (1978-1986) of Deutsche Bank Securities Inc.  Director
                 Officer     1990.         and Secretary, Deutsche Bank AG.  Director, Bankers Trust Co.
                 and                       Secretary, Flag Investors of Flag Investors Funds, Inc. and
                 Secretary                 Deutsche Bank Investment Management, Inc. (1997-2000).
-----------------------------------------------------------------------------------------------------------------------------


                                        5




                                                                                                                   SHARES
                               TERM OF                                                                           OF COMMON
                              OFFICE AND                                                                           STOCK
                 POSITION(S)  LENGTH OF                                 PRINCIPAL                               BENEFICIALLY
 NAME, ADDRESS      WITH         TIME                                 OCCUPATION(S)                               OWNED AT
     & AGE          FUND        SERVED                           DURING PAST FIVE YEARS                         MAY 1, 2003(3)
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Joseph Cheung,   Chief       Year to       Vice President (since 1996), Assistant Vice President (1994-1996)        None.
44               Financial   year since    and Associate (1991-1994) of Deutsche Bank Securities Inc.
                 Officer     1997.
                 and
                 Treasurer
-----------------------------------------------------------------------------------------------------------------------------


1    Unless  otherwise  indicated,  the address of all directors and officers is
     c/o Deutsche Bank  Securities,  Inc.,  345 Park Avenue,  New York, New York
     10154.
2    Includes The Germany Fund, Inc. and the New Germany Fund,  Inc.,  which are
     the other  closed-end  registered  investment  companies for which Deutsche
     Bank Securities Inc. acts as manager.  It also includes 204 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 (13 persons)  owned 15,744
     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    Indicates  "Interested Person", as defined in the Investment Company Act of
     1940, as amended (the "1940 Act"). Mr. Bierbaum is an "interested" Director
     because of his affiliation with Sal. Oppenheim Jr. & Cie KGaA, which is the
     parent  company  of  a  registered  broker-dealer;   and  Mr.  Bult  is  an
     "interested"  Director because of his affiliation  with U.B.S.  PaineWebber
     Incorporated,   a  registered   broker-dealer;   and  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 and because of his ownership of Deutsche Bank shares.
5    The  Germany  Fund,  Inc.  and the New  Germany  Fund,  Inc.  are the other
     closed-end   registered   investment  companies  for  which  Deutsche  Bank
     Securities,  Inc. acts as manager. Messrs. Burt and Wadsworth also serve as
     Directors/Trustees of the BT Investment Funds, BT Advisor Funds, BT Pyramid
     Mutual  Funds,  BT  Institutional  Funds,  BT Investment  Portfolios,  Cash
     Management  Portfolio,  Treasury  Money  Portfolio,   International  Equity
     Portfolio,  Equity 500 Index  Portfolio,  Asset Management  Portfolio,  and
     Deutsche Asset Management VIT Trust. They also serve as  Directors/Trustees
     of the Morgan Grenfell  Investment  Trust,  Deutsche  Investors  Portfolios
     Trust, Deutsche Investors Funds, Inc., Scudder Flag Investors Value Builder
     Funds,  Inc.,  Scudder Flag Investors Equity Partners Fund,  Inc.,  Scudder
     Flag Investors  Communications  Fund,  Inc., and Deutsche Bank Alex.  Brown
     Cash Reserves  Fund,  Inc. They also serve as  Directors/Trustees  of RREEF
     Securities  Trust, an open-end  investment  company,  and RREEF Real Estate
     Fund,  Inc., a closed-end  investment  company.  These Funds are advised by
     either  Deutsche  Asset   Management,   Inc.,   Deutsche  Asset  Management
     investment  Services Limited,  or Investment  Company Capital Corp, each an
     indirect, wholly-owned subsidiary of Deutsche Bank AG.
6    Dr.  Tessen von  Heydebreck,  a managing  director of Deutsche  Bank,  is a
     member of the supervisory board of BASF AG, Mr. Voscherau's employer.
7    Each also  serving as an  officer of The  Germany  Fund,  Inc.  and The New
     Germany  Fund,  Inc. The  officers of the Fund are elected  annually by the
     Board  of  Directors  at  its  meeting  following  the  Annual  Meeting  of
     Stockholders.
8    Indicates  ownership  of  securities  of Deutsche  Bank either  directly or
     through Deutsche Bank's deferred compensation plan.
9    In December 2001, Mr.  Langhammer's two adult children  borrowed $1 million
     from a  Deutsche  Bank  Group  company.  The  loan,  which  is  secured  by
     collateral furnished by Mr. Langhammer, bears interest at 3-month LIBOR and
     is of indefinite duration.  As of May 9, 2003, the full principal  remained
     outstanding.

         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


                                        6


overseen  by the  Director  or  Nominee  within  the same  Family of  Investment
Companies as the Fund:




                                                                  AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
                                    DOLLAR RANGE OF EQUITY        FUNDS OVERSEEN BY DIRECTOR OR NOMINEE IN FAMILY OF
 NAME OF DIRECTOR OR NOMINEE       SECURITIES IN THE FUND(1)                   INVESTMENT COMPANIES (1),(2)
------------------------------ ---------------------------------- ----------------------------------------------------
                                                                            
Detlef Bierbaum                              None.                                       None.
John Bult                              $10,001 - $50,000                          $50,001 - $100,000
Ambassador Richard R. Burt               $1 - $10,000                              $10,001 - $50,000
Fred H. Langhammer                           None.                                       None.
Edward C. Schmults                     $10,001 - $50,000                           $10,001 - $50,000
Christian H. Strenger                  $10,001 - $50,000                           $10,001 - $50,000
Eggert Voscherau                             None.                                       None.
Robert H. Wadsworth                    $10,001 - $50,000                          $50,001 - $100,000
Werner Walbrol                         $10,001 - $50,000                           $10,001 - $50,000
------------------------------ ---------------------------------- ----------------------------------------------------

(1)  Valuation date is May 2, 2003.

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



         The Board of Directors  presently  has an audit  committee  (the "Audit
Committee") composed of Messrs. Burt, Schmults, Wadsworth and Walbrol. The Audit
Committee makes recommendations to the full Board with respect to the engagement
of independent accountants and reviews with the independent accountants the plan
and results of the audit  engagement and matters  having a material  effect upon
the Fund's financial operations. The Audit Committee met twice during the fiscal
year ended  October 31, 2002. In addition,  the Board has an advisory  committee
(the "Advisory  Committee") composed of Messrs.  Burt,  Schmults,  Wadsworth and
Walbrol.  The Advisory  Committee makes  recommendations  to the full Board with
respect  to  the  Management  Agreement  between  the  Fund  and  Deutsche  Bank
Securities Inc. ("DBSI") and the Investment  Advisory Agreement between the Fund
and  Deutsche  Asset  Management   International  GmbH  ("DeAM").  The  Advisory
Committee met once during the past fiscal year.  The Board also has an executive
committee  (the  "Executive   Committee")   and  a  nominating   committee  (the
"Nominating  Committee").  During the past fiscal year, the Nominating Committee
met once and the Executive  Committee did not meet. The members of the Executive
Committee are Messrs.  Burt,  Schmults,  Strenger,  Wadsworth  and Walbrol.  The
Executive  Committee  has the  authority  to act for the  Board  on all  matters
between meetings of the Board, subject to any limitations under applicable state
law. The members of the  Nominating  Committee are Messrs.  Burt,  Wadsworth and
Walbrol. The Nominating  Committee makes  recommendations to the full Board with
respect  to the  selection  of  candidates  to fill  vacancies  on the  Board of
Directors intended to be filled by persons not affiliated with DBSI or DeAM, and
the  Nominating  Committee  evaluates  the  qualifications  of all  nominees for
directorship  pursuant to the director  qualification  provisions  in the Fund's
bylaws.  The Nominating  Committee will consider  suggestions from  stockholders
submitted  in  writing  to the  Secretary  of the  Fund  that  comply  with  the
requirements for such proposals  contained in the Fund's bylaws.  All members on
each of the four committees of the Board are non-interested persons (except that
Mr. Strenger, an interested person, is a member of the Executive Committee).

         During the past fiscal year,  the Board of  Directors  had four regular
meetings,  and each  incumbent  Director  attended at least 75% of the aggregate
number of meetings of the Board and meetings of Board  Committees  on which that
Director served.

         The Fund pays each of its Directors who is not an interested  person of
the Fund,  the  Investment  Adviser or the  Manager an annual fee of $7,500 plus
$750 for each meeting attended. Each such Director who is also a Director of The
Germany Fund,  Inc. or The New Germany Fund,  Inc. also receives the same annual
and per-meeting fees for services as a Director of each such fund.  Effective as
of April 24,  2002,  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,  effective as of January 1, 2002, no such Director
receives  more than the annual fee of two funds.  Each of the Fund,  The Germany
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 204 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  Securities  and Exchange  Commission
("SEC"). The following table sets forth (a) the aggregate  compensation from the
Fund for the fiscal year ended October 31, 2002, and (b) the total  compensation
from the Fund Complex that  includes the Fund for its fiscal year ended  October
31, 2002,  and such other funds for the year ended  December 31, 2002,  for each


                                       7


Director who is not an interested person of the Fund, and for all such Directors
as a group:

                            Aggregate Compensation       Total Compensation
   Name of Director                From Fund             From Fund Complex
  ------------------          -------------------        ------------------
Richard R. Burt                    $13,500                    $153,000
Edward C. Schmults                  12,000                      26,250
Robert H. Wadsworth                  9,750                     156,000
Werner Walbrol                      14,250                      29,250
                Total              $49,500                    $364,500


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

             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 APPOINTMENT OF INDEPENDENT
                                  ACCOUNTANTS

         The Audit Committee has approved PricewaterhouseCoopers LLP (the "Firm"
or "PwC") as  independent  accountants  for the Fund for the fiscal  year ending
October 31, 2003. 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  1940  Act)  of the  Fund,  have  ratified  the
appointment of PwC as the Fund's  independent  accountants for that fiscal year.
Based principally on 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  accountants for the
Fund since inception.

         Neither our charter nor bylaws  requires that the  stockholders  ratify
the appointment of PwC as our independent  accountants.  We are doing so because
we believe it is a matter of good corporate practice. If the stockholders do not
ratify the  appointment,  the Board of Directors  and the Audit  Committee  will
reconsider  whether  or not to  retain  PwC,  but may  retain  such  independent
accountants. Even if the appointment is ratified, the Board of Directors and the
Audit  Committee  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 Board of Directors of PwC as independent
accountants for the Fund for the fiscal year ending October 31, 2003. For
purposes of Proposal 2, abstentions will have no effect on the result of the
vote.

         INFORMATION WITH RESPECT TO THE FUND'S INDEPENDENT ACCOUNTANTS

AUDIT FEES

         The aggregate fees billed by PwC for professional services rendered for
the Audit of the Fund's annual  financial  statements  for the fiscal year ended
October 31, 2002 were $55,000.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

         PwC did not  render any  information  technology  services  to the Fund
during the fiscal year ended October 31, 2002.

ALL OTHER FEES

         The aggregate fees billed by PwC for tax services rendered to the Fund,
other than the services  described  above under "Audit Fees" for the fiscal year
ended October 31, 2002, were $12,000. The aggregate fees billed by PwC for audit
and other  services to  registered  investment  companies  advised or managed by
companies  within the Deutsche  Bank group for the fiscal year ended October 31,
2002 were $5,145,790. In addition, the aggregate fees billed by PwC for services
rendered to the U.S. asset  management  business within the Deutsche Bank group,
including  DBSI,  for the fiscal year ended October 31, 2002 were  approximately
$6,574,025.

                                       8


                             AUDIT COMMITTEE REPORT

         The role of the  Audit  Committee  is to  assist  the  Board (i) in its
oversight  of the Fund's  accounting  and  financial  reporting  principles  and
related controls,  (ii) in its oversight of the Fund's financial  statements and
the independent audit thereof, (iii) in selecting,  evaluating and replacing (if
appropriate) the outside  accountants and (iv) in evaluating the independence of
the outside accountants.  The Board of Directors has determined that all members
of the Audit  Committee are  "independent",  as required by  applicable  listing
standards of the New York Stock Exchange.  The Audit Committee operates pursuant
to an Audit Committee Charter that was last amended and restated by the Board on
April  20,  2001,  a copy of  which  is  attached  as  Exhibit  A to this  Proxy
Statement.  As set forth in the Audit Committee Charter,  management of the Fund
is responsible  for the  preparation,  presentation  and integrity of the Fund's
financial statements,  the Fund's accounting and financial reporting principles,
and internal controls  designed to assure  compliance with accounting  standards
and applicable laws and regulations. The independent accountants are responsible
for auditing the Fund's  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  accountants.  The Audit  Committee has also discussed with the
independent  accountants  the matters  required to be  discussed by Statement on
Auditing  Standards No. 61,  Communication  with Audit Committees,  as currently
modified or supplemented.  Finally, the Audit Committee has received the written
disclosures  and  the  letter  from  the  independent  accountants  required  by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees,   as  currently  in  effect,  has  discussed  with  the  independent
accountants the accountants' independence from the Fund and its management,  and
has  considered  whether  the  provision  of  non-audit  services  to the Fund's
investment  manager and adviser and their affiliated  persons by the independent
accountants  is  compatible  with   maintaining  the  independent   accountants'
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.  Furthermore,  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 independent accountants 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 that the  audited  financial  statements  be included in the Fund's
Annual Report for the fiscal year ended October 31, 2002.

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

Ambassador Richard R. Burt
Edward C. Schmults
Robert H. Wadsworth
Werner Walbrol



                                       9



        PROPOSAL 3: TO APPROVE CHANGES TO THE FUND'S INVESTMENT POLICIES
                    TO PERMIT EXPANDED INVESTMENT IN RUSSIA

SUMMARY OF PROPOSAL

         The Board of Directors of the Fund has considered and approved, subject
to stockholder approval, a change to the Fund's fundamental investment policies
intended to permit increased flexibility in the Fund's investments in Central
Europe and Russia. Currently, the Fund has a fundamental policy requiring that
it invest at least 65% of the Fund's total assets in Central Europe (which does
not include Russia), and a non-fundamental policy to invest at least 80% of its
net assets in Central Europe, and up to 20% of its net assets in other European
countries or in Russia. If approved by stockholders, the changes would establish
a fundamental policy to invest at least 80% of the Fund's net assets in Central
Europe and Russia (versus the current policy requiring at least 80% in Central
Europe). In addition, the Board of Directors of the Fund has adopted a
non-fundamental policy that, for the time being, the Fund will not invest more
than 35% of its total assets in Russia (versus the current limitation of 20% in
Russia). If Proposal 3 is approved, the Fund's name will be changed to "The
Central Europe and Russia Fund, Inc."

         This proposal is not conditioned on stockholder approval of eliminating
the 15% per-issuer limit (Proposal 4).

CURRENT INVESTMENT OBJECTIVE AND POLICIES AND REASONS FOR PROPOSED CHANGES

         Since 1997, the Fund's investment objective has been to seek long-term
capital appreciation through investment primarily in equity and equity-linked
securities of issuers domiciled in Central Europe. The Fund also invests in
Russia.

         As background, in 1997, stockholders had approved an amendment to the
Fund's fundamental investment objectives and policies to eliminate the required
focus on investing in Germany and Austria and to permit the Fund to invest
without restriction in Eastern Europe. The Fund's fundamental investment
policies were amended at that time to require at least 65% of the Fund's total
assets in Central Europe, which was redefined to include Eastern Europe, plus
Switzerland, Moldova, Montenegro and Serbia, but excluding Russia. A
non-fundamental policy was also added to invest at least 80% of its net assets
in Central Europe. Up to a 20% investment in other European countries or in
Russia was also authorized.

         The effect of the changes described above has been to allow the Fund
additional flexibility to take advantage of developments in the securities
markets in Central Europe. As discussed in the next section, the Fund wants to
continue to invest in companies domiciled in Central Europe and wants greater
flexibility to take advantage of the opportunities available in the Russian
securities markets.

PROPOSED INVESTMENT POLICIES

         Expanded Investment in Russia. Deutsche Bank Securities, Inc., the
Fund's Manager ("DSBI" or the "Manager"), and Deutsche Asset Management
International GmbH, the Fund's investment adviser ("DeAM" or the "Investment
Adviser") have recommended, and the Directors have approved and authorized for
submission to stockholders, that the Fund's investment policies be changed as
described above under "Summary of Proposal." The Fund's investment objective,
policies and restrictions, after giving effect to these changes and those in
Proposals 4 and 5, are set forth in Exhibit B to this Proxy Statement and
hereinafter referred to as the "Revised Investment Policies."

         The Revised Investment Policies will not change the Fund's fundamental
policy of investing primarily in equity and equity-linked securities of issuers
domiciled in Central Europe, as well as Russia. However, the policy that the
Fund invest at least 80% of its net assets in securities of Central European
issuers will be changed to require, instead, that the Fund invest at least 80%
of its net assets in securities of Central European or Russian issuers. Adoption
by the stockholders of the new fundamental policy would allow the Fund to
increase its investments in Russian issuers. At April 29, 2003, about 81.3% of
the Fund's total assets were invested in equity and equity-linked

                                       10


securities of Central European issuers and 16.1% in Russian issuers. The Fund
believes that developments in the securities markets in Central Europe and
Russia warrant additional flexibility in the Fund's investment policies. In this
respect, subject to stockholder approval of this Proposal 3, the Board of
Directors has also adopted a non-fundamental policy, changeable without
stockholder approval, that for the time being not more than 35% of its total
assets be invested in Russia.

         There are various risks associated with investing in emerging nations,
such as Russia, as described more fully below under "--Risk Factors Relating to
Investing in Russia." The Board also recognizes that due to the liberalization
of Russia's economy, improvement in corporate governance and the reform of
Russia's institutions and taxation system, there are an increasing number of
investment opportunities in Russia. The Board believes the following factors
favor greater investment in Russia:

     o    The market capitalization of the Russian market is much larger than
          that of the Central European market, and the Manager and Investment
          Adviser believe that that this trend will continue.

     o    More investment experience suggest that, although risks are still
          prevalent, those risks tend to be reflected in market prices and are
          more acceptable than in the past in light of the Russian government's
          continued efforts to improve corporate governance and reform its
          institutions and taxation system, and the Manager and Investment
          Adviser expect this process to continue.

     o    As the Russian economy continues to make the transition from a
          socialist to a market economy, the Manager and Investment Adviser
          believe that investment in Russia's equity capital markets becomes
          more attractive.
          o    The Russian economy is expected to grow faster than the Western
               European economies over the next several years.
          o    Foreign direct investment has increased, reflecting greater
               institutional confidence in the Russian economy.
          o    Russian consumer demand is expected to continue to increase given
               Russia's large size and population.

     o    Russia's international relations with Western Europe and other
          market-oriented regions has improved, and the Manager and Investment
          Adviser believe this is a favorable trend.

         Name Change. Rules of the SEC require that a fund's name and investment
policies correspond. If stockholders approve Proposal 3, the Fund must also
change its name. Accordingly, the Board of Directors will change the Fund's name
to "The Central Europe and Russia Fund, Inc." The name change will be made only
if stockholders approve Proposal 3. The Fund's New York Stock Exchange ticker
symbol will remain "CEE."

RISKS FACTORS RELATING TO INVESTMENT IN RUSSIA

         Stockholders  and  potential  investors  should  note  that  there  are
significant  risks  inherent  in  Russian  securities  that  are  not  typically
associated   with  investing  in  securities  of  companies  in  more  developed
countries.   The  value  of  Russian  securities  may  be  affected  by  various
uncertainties,  such as economic,  political and social instability,  investment
and regulatory risk,  including crime and corruption in government and business,
inconsistency and  underdevelopment of its tax and legal systems. As is the case
with  issuers in most  emerging  markets,  Russian  securities  are subject to a
higher degree of volatility than the securities of Western companies. The Fund's
Central  European  investments  share some of these risks,  but  investments  in
Russia should be considered to have greater risks.

         Economic, Political and Social Risks. Since the break-up of the USSR at
the end of 1991,  Russia has  undergone  substantial  and,  at times,  turbulent
economic disruption and political and social upheaval.  Russia continues to make
the transition from a centrally  controlled command system to a market-oriented,
democratic model of government, but its continued development, and the pace with
which it continues to make the transition, remains uncertain. Since 1991, Russia
has been affected by declines in gross domestic  product (GDP),  hyperinflation,
an unstable  currency  and high  government  indebtedness  relative to GDP.  The
Russian economy also suffers from the lack of an effective  banking system and a
significant proportion of commercial  transactions are settled in kind or by the
use of promissory notes. The Russian economy is also plagued by a deteriorating

                                       11


infrastructure due to poor funding and maintenance,  and potential  inflationary
pressures and currency  devaluation as a result of  insufficient  funding on its
debts. Russia's role and its reintegration into the global political economy are
also unsettled.  Moreover,  internal regional conflicts continue to exist, which
highlight the  political  tension  between the central  government in Moscow and
certain regions within the Russian Federation. At times, the Russian governments
also engages in expropriation, nationalism and confiscation of assets.

         The Russian economy relies heavily on the production and export of oil,
and is subject to the oil analysis  industry  risks  described in "Risk  Factors
Relating to Investment in Particular  Industries - Petroleum  Refining and Crude
Petroleum and Natural Gas." Russia also has substantial trading links with Iraq.
Because Russia is highly sensitive to changes in the world oil price and because
of recent U.S. legal and military action against Iraq, it is even more difficult
to predict  future oil price  movements with any certainty and  fluctuations  in
pricing may increase substantially.

         Market  and  Regulatory  Risks.  There is still no  centralized  public
market for trading Russian securities,  despite the number of stock exchanges in
Russia,  and trading  occurs  mostly  over-the-counter.  The Russian  securities
market is still  developing  and is regulated by several  different  authorities
that are  often in  competition  with each  other,  resulting  in  contradictory
regulations, at times. Corporate governance standards for Russian companies have
also  proven to be poor and  minority  stockholders  in Russian  companies  have
suffered   losses  due  to  abusive   share   dilutions,   asset   transfer  and
transfer-pricing  practices,  while stockholders of Russian securities also lack
many of the  protections  available  to  stockholders  of  Western  issuers.  In
addition,  businesses and parts of the Russian  economic system also continue to
suffer from very high crime levels,  including  extortion  and fraud.  Moreover,
accounting,  financial  and  auditing  reporting  by Russian  companies  is also
generally of less quality and less reliable compared with Western companies.

         Investment  and Exchange  Rate Risks.  Laws and  regulations  involving
foreign investment in Russian  enterprises,  title to securities and transfer of
title are also  relatively  new and can change  quickly and  unpredictably  in a
manner far more volatile than in developed market  economies.  The Fund may also
experience  difficulty  transferring  income  received in investments in Russian
issuers,  such as profits,  dividends and interest  payments abroad.  The Fund's
assets will be invested in securities  denominated in Russian Roubles, which are
not externally convertible into other currencies outside of Russia. The value of
the assets of the Fund and its income,  on the other  hand,  will be measured in
U.S. dollars, and may therefore be affected by fluctuations in currency rates as
well as exchange control regulations.

         Taxation and Legal  Systems.  Russia's  taxation  system is  frequently
subject to change and enforcement is inconsistent at federal, regional and local
levels.  Decision-making  and enforcement  under Russia's legal system also lack
any  consistency  as a result of the  volume of new  legislation  and  political
instability.

RECOMMENDATION OF THE BOARD OF  DIRECTORS

         The  Manager  and the  Investment  Adviser  have  advised  the Board of
Directors  that  while the  policy  of  focusing  on  Central  European  issuers
continues  in  their  view  to be  sound,  they  believe  additional  investment
flexibility in the geographic  distribution of the Fund's  investments  would be
desirable,  in  particular,  by  authorizing  the Fund to increase  the level of
investment in securities of Russian issuers.

         Accordingly,  the Board of Directors has approved,  subject to approval
by  stockholders,  the change in the Fund's  fundamental  geographic  investment
policy described above.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 3.

         REQUIRED VOTE.  Approval of a majority of the Fund's outstanding voting
securities,  which is the  lesser of (1) 67% of the Fund's  shares  present at a
meeting of its  stockholders if the owners of more than 50% of the shares of the
Fund then  outstanding are present in person or by proxy or (2) more than 50% of
the Fund's  outstanding  shares.  For  purposes of Proposal 3,  abstentions  and
broker non-votes will have the same effect as votes against the proposal.

                                       12




        PROPOSAL 4: TO CHANGE THE FUND'S INVESTMENT POLICIES TO ELIMINATE
                    THE INDIVIDUAL ISSUER INVESTMENT LIMIT

SUMMARY OF PROPOSAL

         The Board has approved, subject to stockholder approval, eliminating
the Fund's fundamental policy of limiting investment in any single issuer to 15%
of the Fund's total assets. The current per-issuer limitations set by the
Internal Revenue Service (the "IRS") would remain. Under the IRS limitation, the
Fund may not invest more than 25% of the market value of its total assets in any
single issuer and must observe other IRS limits that as a practical matter would
permit the Fund to make a maximum investment, at any one time, of 25% of its
total assets in only two individual issuers, with a 5% limit on the remaining
issuers.

         This proposal is not conditioned on stockholder approval of the Fund's
expanded ability to invest in Russia (Proposal 3).

CURRENT INVESTMENT POLICY

         The Fund currently is not permitted to invest more than 15% of its
total assets in securities of a single issuer. Because some issuers represent a
significant percentage of the Russian market, the Fund would like the
flexibility to invest above this limit. The limitations imposed by the IRS will
remain in effect, thereby limiting the Fund's investments in the securities of
any particular issuer to less than 25% of the market value of its total assets
at the end of each fiscal quarter. The Fund intends generally also to observe
these IRS limits during each fiscal quarter.

PROPOSED INVESTMENT POLICIES

         Eliminating the Issuer Limit. As noted above, if stockholders approve
this proposal, the Fund's fundamental policy limiting investment in securities
of a single issuer to 15% of the Fund's total assets will be eliminated. The
Fund is classified as a "non-diversified" investment company under the 1940 Act,
which means the Fund is not limited by the 1940 Act in the proportion of its
assets that may be invested in the securities of a single issuer. However, the
Fund conducts its operations so as to qualify as a "regulated investment
company" for purposes of the IRS, which relieves the Fund of any liability for
Federal income tax to the extent that its earnings are distributed to
stockholders. To so qualify, among other requirements, the Fund must limit its
investments so that, at the close of each quarter of the taxable year, not more
than 25% of the market value of the Fund's total assets may be invested in the
securities of a single issuer or a group of related issuers. Therefore, while
the Fund's fundamental policy limiting investment in securities of a single
issuer to 15% of the Fund's total assets would be eliminated, the Fund would not
be able to invest more than 25% of the market value of the Fund's total assets
(as of the end of each fiscal quarter), in a single issuer in accordance with
IRS requirements. Furthermore, under the IRS requirements, at least 50% of the
market value of the Fund's total assets must be represented by cash, U.S.
Government securities, and other securities limited, in respect of any one
issuer, to not more than 5% of the market value of the Fund's total assets.
Therefore, even though the Fund can invest up to 25% of its assets in the
securities of a single issuer, as a practical matter it can only invest a
maximum of 25% of its total assets in two separate issuers at any one time, with
a 5% limit on the remaining issuers.

RECOMMENDATION  OF THE BOARD OF  DIRECTORS

         The Manager and the Investment Adviser have advised the Board of
Directors that eliminating the per issuer investment limit of 15% is in their
view sound and would be desirable, and, in particular, would allow the Fund
greater investment flexibility by allowing the Fund to invest more than 15%, but
less than 25%, of its total assets in a particular issuer.


                                       13


         Accordingly, the Board of Directors has approved, subject to approval
by stockholders, the changes in the Fund's fundamental issuer investment policy,
as described above.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 4.

         REQUIRED VOTE. Approval of a majority of the Fund's outstanding voting
securities, which is the lesser of (1) 67% of the Fund's shares present at a
meeting of its stockholders if the owners of more than 50% of the shares of the
Fund then outstanding are present in person or by proxy or (2) more than 50% of
the Fund's outstanding shares. For purposes of Proposal 4, abstentions and
broker non-votes will have the same effect as votes against the proposal.


                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

         As of May 9, 2003 no person, to the knowledge of management, owned of
record or beneficially more than 5% of the outstanding Common Stock of the Fund,
other than as set forth below:


                                                                   PERCENT OF
       NAME AND ADDRESS                AMOUNT AND NATURE          OUTSTANDING
     OF BENEFICIAL OWNER            OF BENEFICIAL OWNERSHIP       COMMON STOCK

MeAG Munich Ergo Kapitalanlage-             507,076                   6.42%
gesellschaft mbH(1)  (Munich,
Germany)

--------------------------------------------------------------------------------
(1)  This information is based exclusively on information provided by such
     person on Schedules 13G filed with respect to the Fund on February 14,
     2003. To the knowledge of management, no other Schedules 13D or 13G had
     been filed with respect to the Fund as of May 9, 2003.

                    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 Bank Securities Inc., the Fund's Manager, is located at 60 Wall Street,
New York, New York 10005.

                       SECTION 16(A) BENEFICIAL OWNERSHIP
                              REPORTING COMPLIANCE

         During the fiscal year ended October 31, 2002, the Fund filed on a
timely basis Forms 4 (Statement of Changes of Beneficial Ownership of
Securities) for all Directors and Officers.

                                  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 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 Securities  Exchange  Commission Rule 14a-8 to be considered for
inclusion  in the  Fund's  proxy  statement  for the 2004  Annual  Meeting,  the
proposals  must be received at The  Central  European  Equity  Fund,  Inc.,  c/o
Deutsche Asset Management, 345 Park Avenue, New York, New York 10154, Attention:
Secretary, on or before January 14, 2004.

         In addition,  the Fund's Bylaws currently provide that if a stockholder
desires  to bring  business  (including  director  nominations)  before the 2004
Annual Meeting that is or is not the subject of a proposal timely  submitted for



                                       14


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 14, 2004 and February
13, 2004. 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 Securities Exchange
Commission Rule 14a-8.

                         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  Morrow & Co.,  Inc.  to
assist  in the  solicitation  of  proxies,  if called  upon by the  Fund,  at an
estimated fee of $7,500 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 October 31, 2002 and the most recent  semi-annual  report,
if any, to any  stockholder  upon request.  Such requests  should be directed by
mail to The Central European Equity Fund,  Inc., c/o Deutsche Asset  Management,
345 Park Avenue,  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.ceefund.com.



                                       Robert R. Gambee
                                       Chief Operating Officer
                                       and Secretary

Dated: May 13, 2003

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 AND RETURN
IT TO THE FUND.



                                       15



                                    EXHIBIT A

                     THE CENTRAL EUROPEAN EQUITY FUND, INC.
                                 (THE "COMPANY")

                             AUDIT COMMITTEE CHARTER

I.   COMPOSITION OF THE AUDIT COMMITTEE:  The Audit Committee comprises at least
     three  directors,  each of whom shall have no  relationship to the Company,
     its investment manager,  its investment adviser or its custodian (including
     sub-custodians)  that  may  interfere  with  the  exercise  of  his  or her
     independence  from  management  and  the  Company  and,  as to  his  or her
     relationship  to  the  Company,  shall  otherwise  satisfy  the  applicable
     membership  requirements  under the rules of the New York  Stock  Exchange,
     Inc., as such requirements are interpreted by the Board of Directors in its
     business judgment. Copies of the relevant requirements are attached hereto.

II.  PURPOSES OF THE AUDIT COMMITTEE: The purposes of the Audit Committee are to
     assist the Board of Directors:

     1.   in its oversight of the Company's  accounting and financial  reporting
          principles and policies and related controls and procedures maintained
          by or on behalf of the Company;

     2.   in its  oversight  of  the  Company's  financial  statements  and  the
          independent audit thereof;

     3.   in selecting, evaluating and, where deemed appropriate,  replacing the
          outside  auditors (or nominating  the outside  auditors to be proposed
          for stockholder approval in the proxy statement); and

     4.   in evaluating the independence of the outside auditors.

     The function of the Audit  Committee is  oversight.  The  management of the
     Company,  including the service providers so contractually  obligated,  are
     responsible  for  the  preparation,   presentation  and  integrity  of  the
     Company's financial statements. Management and applicable service providers
     are  responsible  for  maintaining  appropriate  accounting  and  financial
     reporting  principles  and  policies and related  controls  and  procedures
     designed to assure compliance with accounting standards and applicable laws
     and  regulations.  The outside  auditors are  responsible  for planning and
     carrying out a proper audit of the Company's annual  financial  statements.
     In fulfilling  their  responsibilities  hereunder,  it is  recognized  that
     members of the Audit  Committee are not full-time  employees of the Company
     and are not, and do not represent themselves to be, accountants or auditors
     by profession or experts in the fields of accounting or auditing, including
     in  respect  of  auditor  independence.  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,  and each member of the Audit Committee
     shall  be  entitled  to rely on (i) the  integrity  of  those  persons  and
     organizations  within  and  outside  the  Company  from  which it  receives
     information,  (ii) the  accuracy  of the  financial  and other  information
     provided to the Audit  Committee  by such persons or  organizations  absent
     actual  knowledge to the contrary (which shall be promptly  reported to the
     Board of Directors), and (iii) representations made by management as to any
     information  technology,   internal  audit  and  other  non-audit  services
     provided  by the  auditors  to the  Company,  to the  Company's  investment
     manager,  investment  adviser or any entity  controlling,  controlled by or
     under common  control with the  investment  manager or  investment  adviser
     ("Manager/Adviser  Control  Affiliate"),  or  to  the  Company's  custodian
     (including sub-custodians).

     The outside  auditors  for the Company are  ultimately  accountable  to the
     Board of  Directors  (as  assisted  by the Audit  Committee).  The Board of
     Directors,  with the  assistance of the Audit  Committee,  has the ultimate
     authority and  responsibility to select,  evaluate and, where  appropriate,
     replace the outside  auditors  (or to nominate  the outside  auditors to be
     proposed for stockholder approval in the proxy statement).

     The outside  auditors shall submit to the Company annually a formal written
     statement  delineating all  relationships  between the outside auditors and
     the Company  ("Statement as to  Independence"),  addressing  each non-audit
     service  provided  to the  Company  and at least the  matters  set forth in
     Independence Standards Board No. 1.

                                      A-1


     The outside  auditors shall submit to the Company annually a formal written
     statement  of the fees  billed  for  each of the  following  categories  of
     services rendered by the outside  auditors:  (i) the audit of the Company's
     annual  financial   statements  for  the  most  recent  fiscal  year;  (ii)
     information technology consulting services for the most recent fiscal year,
     in the aggregate and by each service (and separately  identifying  fees for
     such  services  relating  to  financial   information  systems  design  and
     implementation);  and (iii)  all other  services  rendered  by the  outside
     auditors for the most recent  fiscal  year,  in the  aggregate  and by each
     service.  The statement as to (ii) and (iii) should include (and separately
     disclose)  fees billed for the indicated  services to (a) the Company,  (b)
     the Company's  investment  manager,  investment adviser and Manager/Adviser
     Control   Affiliates   that   provide   services   to  the   Company,   (c)
     Manager/Adviser  Control  Affiliates  that do not  provide  services to the
     Company, and (d) the custodian (including sub-custodians).

III. MEETINGS OF THE AUDIT COMMITTEE: The Audit Committee shall meet as often as
     may be  required  to  discuss  the  matters  set  forth in  Article  IV. In
     addition, the Audit Committee should meet separately at least annually with
     management  and the outside  auditors to discuss any matters that the Audit
     Committee  or any of these  persons or firms  believe  should be  discussed
     privately.  The Audit  Committee may request any officer or employee of the
     Company or any  service  provider,  outside  counsel to the  Company or the
     independent directors or the Company's outside auditors to attend a meeting
     of the Audit  Committee or to meet with any members of, or consultants  to,
     the Audit  Committee.  Members of the Audit  Committee may participate in a
     meeting  of the Audit  Committee  by means of  conference  call or  similar
     communications equipment by means of which all persons participating in the
     meeting can hear each other.

IV.  DUTIES AND POWERS OF THE AUDIT  COMMITTEE:  To carry out its purposes,  the
     Audit Committee shall have the following duties and powers:

     1.   with respect to the outside auditor,

          (i)    to  provide  advice to the  Board of  Directors  in  selecting,
                 evaluating or replacing outside auditors;

          (ii)   to review the fees  charged by the outside  auditors  for audit
                 and non-audit services;

          (iii)  to  ensure  that  the  outside  auditors  prepare  and  deliver
                 annually a Statement as to  Independence  (it being  understood
                 that the outside  auditors are responsible for the accuracy and
                 completeness  of this  Statement),  to discuss with the outside
                 auditors  any  relationships  or  services  disclosed  in  this
                 Statement that may impact the objectivity  and  independence of
                 the Company's  outside auditors and to recommend that the Board
                 of  Directors  take  appropriate  action  in  response  to this
                 Statement   to  satisfy   itself  of  the   outside   auditors'
                 independence;

          (iv)   if  applicable,  to  consider  whether  the  outside  auditors'
                 provision of (a)  information  technology  consulting  services
                 relating   to   financial   information   systems   design  and
                 implementation and (b) other non-audit services to the Company,
                 the  Company's   investment  manager,   investment  adviser  or
                 Manager/Adviser  Control Affiliates or the custodian (including
                 sub-custodians) is compatible with maintaining the independence
                 of the outside auditors; and

          (v)    to instruct the outside  auditors that the outside auditors are
                 ultimately  accountable  to the  Board of  Directors  and Audit
                 Committee;

     2.   with  respect to  financial  reporting  principles  and  policies  and
          related controls and procedures,

          (i)    to advise  management  and the outside  auditors  that they are
                 expected  to  provide  or cause  to be  provided  to the  Audit
                 Committee a timely analysis of significant  financial reporting
                 issues and practices;

          (ii)   to consider  any reports or  communications  (and  management's
                 responses  thereto)  submitted  to the Audit  Committee  by the
                 outside  auditors  required  by or  referred  to in  SAS 61 (as
                 codified   by  AU  Section   380),   as  may  be   modified  or
                 supplemented, including reports and communications related to:

                 o  deficiencies  noted in the audit in the design or  operation
                    of related controls;

                 o  consideration of fraud in a financial statement audit;

                                      A-2


                 o  detection of illegal acts;

                 o  the  outside   auditor's   responsibility   under  generally
                    accepted auditing standards;

                 o  significant accounting policies;

                 o  management judgments and accounting estimates;

                 o  adjustments arising from the audit;

                 o  the   responsibility   of  the  outside  auditor  for  other
                    information  in  documents   containing   audited  financial
                    statements;

                 o  disagreements with management;

                 o  consultation by management with other accountants;

                 o  major issues discussed with management prior to retention of
                    the outside auditor;

                 o  difficulties  encountered  with management in performing the
                    audit; and

                 o  the  outside  auditor's  judgments  about the quality of the
                    entity's accounting principles;

          (iii)  to meet with management and/or the outside auditors:

                 o  to discuss the scope of the annual audit;

                 o  to discuss the audited financial statements;

                 o  to discuss any significant matters arising from any audit or
                    report or  communication  referred  to in item 2(ii)  above,
                    whether  raised  by  management  or  the  outside  auditors,
                    relating to the Company's financial statements;

                 o  to review the form of opinion the outside  auditors  propose
                    to render to the Board of Directors and stockholders;

                 o  to discuss  allocations of expenses  between the Company and
                    other entities;

                 o  to discuss the Company's compliance with Subchapter M of the
                    Internal Revenue Code of 1986, as amended;

                 o  to discuss with  management  and the outside  auditors their
                    respective  procedures to assess the  representativeness  of
                    securities prices provided by external pricing services;

                 o  to discuss with outside auditors their conclusions as to the
                    reasonableness of procedures  employed to determine the fair
                    value of  securities  for  which  readily  available  market
                    quotations are not available, management's adherence to such
                    procedures and the adequacy of supporting documentation;

                 o  to discuss significant changes to the Company's auditing and
                    accounting principles,  policies,  controls,  procedures and
                    practices  proposed or contemplated by the outside  auditors
                    or management; and

                 o  to inquire about  significant  risks and exposures,  if any,
                    and the steps taken to monitor and minimize such risks; and

          (iv)   to discuss with the Company's  legal  advisors any  significant
                 legal matters that may have a material  effect on the financial
                 statements; and

     3.   with respect to reporting, recommendations and other matters,

          (i)    to provide  advice to the Board of Directors  in selecting  the
                 principal accounting officer of the Company;

          (ii)   to  prepare  any  report or other  disclosures,  including  any
                 recommendation of the Audit Committee, required by the rules of
                 the  Securities  and Exchange  Commission to be included in the
                 Company's annual proxy statement;

                                      A-3


          (iii)  to review this  Charter at least  annually  and  recommend  any
                 changes to the full Board of Directors; and

          (iv)   to report its  activities  to the full Board of  Directors on a
                 regular basis and to make such  recommendations with respect to
                 the above and other  matters  as the Audit  Committee  may deem
                 necessary or appropriate.

V.   RESOURCES AND AUTHORITY OF THE AUDIT  COMMITTEE:  The Audit Committee shall
     have  the   resources   and   authority   appropriate   to  discharge   its
     responsibilities,  including the authority to engage  outside  auditors for
     special audits,  reviews and other procedures and to retain special counsel
     and other experts or consultants.


                                      A-4


                                    EXHIBIT B

                           REVISED INVESTMENT POLICIES

         If Proposals 3 and 4 are approved by stockholders, the Fund's
investment objective and policies and investment restrictions would read as
follows:

INVESTMENT OBJECTIVE AND POLICIES

         Investment Objective. The investment objective of The Central Europe
and Russia Fund, Inc. (the "Fund") is to seek long-term capital appreciation
through investment primarily in equity and equity-linked securities of issuers
domiciled in Central Europe and Russia. The term "Central Europe" includes, for
this purpose, the Republic of Albania, the Republic of Austria, the Republic of
Bosnia and Herzegovina, the Republic of Belarus, the Republic of Bulgaria, the
Republic of Croatia, the Czech Republic, the Republic of Estonia, the Federal
Republic of Germany, the Republic of Hungary, the Republic of Latvia, the Grand
Duchy of Liechtenstein, the Republic of Lithuania, the Former Yugoslav Republic
of Macedonia, the Republic of Moldova, the Republic of Poland, Romania, the
Slovak Republic, the Republic of Slovenia, the Swiss Confederation
("Switzerland"), Ukraine and the Federal Republic of Yugoslavia.

         Under normal circumstances, at least 80% of the Fund's net assets will
be invested in the securities of issuers domiciled in Central Europe or Russia
(plus 80% of any assets funded with leverage), although the Fund does not borrow
money, except in an emergency or under exceptional circumstances as described
below in investment policy (3) under "Investment Restrictions." The Fund may
also invest in equity or equity-linked securities of issuers domiciled elsewhere
in Europe. An issuer is deemed to be "domiciled" in a country or region if (a)
it is organized under the laws of that country, or a country within that region,
or maintains its principal place of business in that country or region, (b) it
derives 50% or more of its annual revenues or profits from goods produced or
sold, investments made or service performed in that country or region, or has
50% or more of its assets in that country or region, in each case as determined
in good faith by Deutsche Bank Securities, Inc., the Fund's Manager ("DSBI" or
the "Manager") or (c) its equity securities are traded principally in that
country or region.

         The term "Europe" includes the countries of Central Europe, as well as
the Kingdom of Belgium, the Kingdom of Denmark, the Republic of Finland, the
Republic of France, the Hellenic Republic ("Greece"), the Republic of Iceland,
the Republic of Ireland, the Italian Republic, the Grand Duchy of Luxembourg,
the Kingdom of the Netherlands, the Kingdom of Norway, the Republic of Portugal,
the Kingdom of Spain, the Kingdom of Sweden, the Republic of Turkey and the
United Kingdom of Great Britain and Northern Ireland. Any future country or
countries (or other political entity) formed by combination or division of the
countries comprising Central Europe, Europe or Russia shall also be deemed to be
included within the term "Central Europe", "Europe" or "Russia", respectively.

         The Fund's investment objective and the foregoing investment policies
are fundamental, and may only be changed by the approval of a majority of the
Fund's outstanding voting securities, which is defined in the Investment Company
Act of 1940, as amended (the "1940 Act"), as the lesser of (1) 67% of the Fund's
shares present at a meeting of its stockholders if the owners of more than 50%
of the shares of the Fund then outstanding are present in person or by proxy or
(2) more than 50% of the Fund's outstanding shares (a "Majority Vote"). The Fund
will not trade in securities for short-term gain. Current interest and dividend
income are not an objective of the Fund. No assurance can be given that the Fund
will be able to achieve its objective.

         Portfolio Structure. The Fund will seek to achieve its investment
objective of long-term capital appreciation primarily by investing in equity and
equity-linked securities of companies in a spectrum of industries. Equity and
equity-linked securities include common stock, convertible and non-convertible
preferred stock, whether voting or non-voting, convertible bonds, bonds with
warrants and unattached warrants. Equity-linked securities refer to debt
securities convertible into equity and securities such as warrants, options and
futures, the prices of which reflect the value of the equity securities
receivable upon exercise or settlement thereof. For a discussion of the types of
futures and options that the Fund may or may not invest in, see the discussion
under "--Futures and Options."




         The Fund will not concentrate investmnets in any one industry, which
means that the Fund will not invest 25% or more of its total assets in the
securities of issuers in any one industry.

         In selecting industries and companies for investment by the Fund,
Deutsche Asset Management International GmbH ("DeAM" or the "Investment
Adviser") and Deutsche Bank Securities Inc. ("DBS" or the "Manager") generally
consider factors such as overall growth prospects, competitive position in their
product markets, management, technology, research and development, productivity,
labor costs, raw material costs and sources, profit margins, return on
investment, capital resources and government regulation.

         The Fund has no current intention of focusing its investments in any
particular countries other than Poland, Hungary, the Czech Republic and Russia,
where its investment is and may in the future be significant (at April 29, 2003,
Poland - 37.9%, Hungary - 27.5%, the Czech Republic - 12.1%, Russia - 16.1%);
however, except as described below, there are no prescribed limits on geographic
asset distribution within Central Europe and Russia and, from time to time, a
significant portion of the Fund's assets may be invested in companies domiciled
in as few as three countries. The Board of Directors has also adopted a
non-fundamental policy, which may be changed without stockholder approval, that
for the time being, permits investment up to the following percentages of the

                                      B-2


value of its total assets in equity and equity-linked securities of issuers
domiciled in the following countries. The Board reserves the right to change
this policy.

          Country                    Percentage of Total Asset Limit
          -------                    -------------------------------
          Poland                     65%
          Hungary                    50%
          Russia                     35%
          Czech Republic             30%
          Other                      15%


         The Fund may not purchase more than 10% of the voting securities of any
single issuer.

         Although it intends to focus its investments in equities or
equity-linked securities that are listed on a recognized securities exchange or
otherwise publicly traded, the Fund may also invest in securities that are not
readily marketable. The Fund may also invest in other investment companies,
subject to applicable limitations under the 1940 Act. These limitations include
a prohibition on the Fund's acquiring more than 3% of the voting securities of
any other investment company or more than 10% of its total assets in securities
of all investment companies. Any investment companies in which the Fund may
invest will have a policy of investing all or substantially all of their assets
in one or more European countries or Russia. Such investments may involve an
additional layer of expenses because of the fees and expenses payable by such
other investment companies. In determining whether to invest assets of the Fund
in other investment companies, the Manager and Investment Adviser will take into
consideration, among other factors, the advisory fee and other expenses payable
by such other investment companies.

         Warrants. The Fund may also invest in warrants if consistent with the
Fund's investment objective. The warrants in which the Fund may invest are a
type of security, usually issued together with another security of an issuer,
that entitles the holder to buy a fixed amount of common or preferred stock of
such issuer at a specified price for a fixed period of time (which may be in
perpetuity). Warrants are commonly issued attached to other securities of the
issuer as a method of making such securities more attractive and are usually
detachable and thus may be bought or sold separately from the issued security.
Warrants can be a speculative instrument. The value of a warrant may decline
because of a decrease in the value of the underlying stock, the passage of time
or a change in perception as to the potential of the underlying stock, or any
combination thereof. If the market price of the underlying stock is below the
exercise price set forth in the warrant on the expiration date, the warrant will
expire worthless. Publicly traded warrants currently exist with respect to the
stock of a significant number of European companies.

         Participation Certificates. Certain German, Swiss and Austrian
companies have issued participation certificates ("Participation Certificates"
or "Genuss-Scheine"), which entitle the holder to participate only in dividend
distributions, generally at rates above those declared on the issuers' common
stock, but not to vote, nor usually to any claim for assets in liquidation.
Participation Certificates trade like common stock, either in the
over-the-counter market or through the relevant stock exchanges. Such securities
may have higher yields; however, they may be less liquid than common stock. The
Fund may invest in Participation Certificates of issuers in any European country
or Russia.

         Futures and Options. For hedging purposes, the Fund may also purchase
put and call options on stock of European or Russian issuers and, to the extent
permitted by applicable U.S. law, invest in the index and bond futures and any
other derivative securities listed on any organized exchange. Options are
contracts which give the buyer the right, but not the obligation, to buy or sell
a fixed amount of securities at a fixed price for a fixed period of time. A
futures contract is a binding obligation to purchase or deliver the specific
type of financial instrument, or the cash equivalent thereof in certain
circumstances, called for in the contract at a specific price at a future date.
The Fund will only invest in options or futures in an attempt to hedge against
changes or anticipated changes in the value of particular securities in its
portfolio or all or a portion of its portfolio. The Fund will not invest in
options or futures if, immediately thereafter, more than the amount of its total
assets would be hedged. For hedging purposes, the Fund may also purchase put and
call options on bonds and other securities, as well as securities indices, if
and when such investments become available. The Fund may invest in other
options, futures and options on futures with

                                      B-3


respect to any securities or securities indices compatible with its investment
objective that may from time to time become available on any organized exchange,
if permitted by applicable law.

         The Fund may also write (e.g., sell) covered call options on its
portfolio securities and appropriate securities indices for purposes of
generating income. The Fund may write (e.g., sell) covered call options on
portfolio securities and appropriate securities indices up to the amount of its
entire portfolio. A call option gives the holder the right to purchase the
underlying securities from the Fund at a special price (the "exercise price")
for a stated period of time (usually three, six or nine months). Prior to the
expiration of the option, the writer (e.g., seller) of the option has an
obligation to sell the underlying security to the holder of the option at the
exercise price regardless of the market price of the security at the time the
option is exercised. The initial purchaser of an option pays the writer a
premium, which is paid at time of purchase and is retained by the writer whether
or not the option is exercised. A "covered" call option means that so long as
the Fund is obligated as the writer of the option, it will own (i) the
underlying securities subject to the option, (ii) securities convertible or
exchangeable without the payment of any consideration into the securities
subject to the option or (iii) warrants on the securities subject to the option
exercisable at a price not greater than the option exercise price and, at the
time the option is exercisable, the securities subject to the option. In the
case of covered call options on securities indices, references to securities in
clauses (i), (ii) or (iii) will include such securities as the Investment
Adviser believes approximate the index (but not necessarily all those comprising
the index), as well as, in the case of clauses (ii) and (iii), securities
convertible, exchangeable or exercisable into the value of the index. The
writing of a call option may involve the pledge of the underlying security which
the call option covers, or other portfolio securities. In order to make use of
its authority to write covered call options, the Fund may pledge its assets in
connection therewith.

         In the event the option is exercised, the writer may either deliver the
underlying securities at the exercise price or if it does not wish to deliver
its own securities, purchase new securities at a cost to the writer, which may
be more than the exercise price premium received, and deliver the new securities
for the exercise option. In the event the option is exercised, the Fund's
potential for gain is limited to the difference between the exercise price plus
the premium less the cost of the security. Alternatively, the option's position
could be extinguished or closed out by purchasing a like option. It is possible,
although considered unlikely, that the Fund might be unable to execute such a
closing purchase transaction. If the price of a security declines below the
amount to be received from the exercise price less the amount of the call
premium received and if the option could not be closed out, the Fund would hold
a security which might otherwise have been sold to protect against depreciation.
In addition, the Fund's portfolio turnover may increase to the extent that the
market price of underlying securities covered by call options written by the
Fund increases and the Fund has not entered into closing purchase transactions.
Brokerage commissions associated with writing options transactions are normally
higher than those associated with other securities transactions.

         Fixed Income Securities. The Fund may also invest up to 20% of its
total assets in fixed income securities of European or Russian issuers. Such
investments may include debt instruments issued by private and public entities,
including multinational lending institutions and supranational institutions if
denominated in a European or Russian currency or composite currency, which have
been determined by the Fund's Investment Adviser and Manager to be of comparable
credit quality to securities rated in the three highest categories by Moody's
Investors Service, Inc. or Standard & Poor's Corporation. When selecting a debt
instrument from among several investment opportunities, the Investment Adviser
and Manager will consider the potential for capital appreciation, taking into
account maturity and yield considerations. For temporary defensive purposes, the
Fund also may invest in money market instruments denominated in U.S. dollars or
in a European or the Russian currency or composite currency, including bank time
deposits and certificates of deposit.

         Loaned Securities. The Fund may also lend its portfolio securities to
banks, securities dealers and other institutions meeting the creditworthiness
standards established by the Fund's Board of Directors. The Fund may lend its
portfolio securities so long as the terms and the structure of such loans are
not inconsistent with the 1940 Act, which currently requires that (a) the
borrower pledge and maintain with the Fund collateral consisting of cash, a
letter of credit issued by a domestic United States bank or securities issued or
guaranteed by the United States Government having a value at all times of not
less than 100% of the value of the securities loaned, (b) the borrower add to
such collateral whenever the price of the loaned securities rises (e.g., the
value of the loan is "marked to market" on a daily basis), (c) the loan be made
subject to termination by the Fund at any time and (d) the Fund receive
reasonable interest on the loan (which may include a portion of the interest
from the Fund's investing any

                                      B-4


cash collateral in interest bearing short-term investments). Any such collateral
may be invested by the Fund in repurchase agreements collateralized by
securities issued or guaranteed by the United States Government. Any
distributions on the loaned securities and any increase in their market value
accrue to the Fund. Loan arrangements made by the Fund will comply with all
other applicable regulatory requirements. All relevant facts and circumstances,
including the creditworthiness of the borrowing institution, will be monitored
by the Fund's Investment Adviser and Manager, and will be considered in making
decisions with respect to lending of securities, subject to review by the Fund's
Board of Directors. The Fund may pay reasonable negotiated fees in connection
with loaned securities, so long as such fees are set forth in a written contract
and approved by the Fund's Board of Directors. In addition, any voting rights
may pass with the loaned securities, but if a material event were to occur
affecting an investment on loan, the loan may be called and the securities
voted. Any gain or loss in the market price of the loaned securities that may
occur during the term of the loan will be for the account of the Fund.

         Currency Transactions. The Fund may attempt to hedge its foreign
currency exposure by entering into forward currency contracts. The Fund does not
currently engage in foreign exchange transactions as an investment strategy.
However, at such future time as the Investment Adviser and Manager believe that
one or more currencies in which the Fund's securities are denominated might
suffer a substantial decline against the U.S. dollar, the Fund may, in order to
hedge the value of the Fund's portfolio, enter into forward contracts, e.g., to
sell fixed amounts of such currencies for fixed amounts of U.S. dollars in the
interbank market. A forward currency contract involves an obligation to purchase
or sell a specific currency at a future date, which may be any fixed number of
days from the date of the contract agreed upon by the parties, at a price set at
the time of the contract.

         The Fund's dealings in forward exchange transactions will be limited to
hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward currency with respect to
specific receivables or payables of the Fund, which will generally arise in
connection with the purchase or sale of its portfolio securities. Position
hedging is the sale of forward currency with respect to portfolio security
positions denominated or generally quoted in that currency.

         The Fund may engage in "conventional hedging", which involves entering
into forward currency contracts to sell fixed amounts of a foreign currency
(e.g., Polish zlotys) for fixed amounts of U.S. dollars in order to hedge the
U.S. dollar value of its portfolio. The Fund may also engage in "cross-hedging",
which involves entering into forward currency contracts to sell fixed amounts of
such foreign currency (e.g., Polish zlotys) for fixed amounts of another foreign
currency to which the Fund may seek exposure (e.g., Deutsche marks or Austrian
schillings).

         The Fund may not position a hedge with respect to any currency to an
extent greater than the aggregate market value (at the time of making such sale)
of the securities held in its portfolio denominated or generally quoted in or
currently convertible into such currency. If the Fund enters into a hedging
transaction, the Fund's custodian or subcustodian will place cash or U.S.
Government or other liquid securities in a segregated account of the Fund in an
amount equal to the value of the Fund's total assets committed to the
consummation of the forward contract, which value will be adjusted on a daily
basis. If the value of the securities placed in the segregated account declines,
additional cash or securities will be placed in the account so that the value of
the account will equal the amount of the Fund's commitment with respect to the
contract.

INVESTMENT RESTRICTIONS

         In addition to its investment objective and the other investment
policies so indicated under "Investment Objective and Policies - Investment
Objective," the Fund has adopted certain investment restrictions, which are
fundamental policies and cannot be changed without a Majority Vote of the Fund's
stockholders. For purposes of the foregoing restrictions and the restrictions
listed below, all percentage limitations apply only immediately after a
transaction, and any subsequent change in any applicable percentage resulting
from changing values will not require elimination of any security from the
Fund's portfolio.

         The Fund may not:

         (1) purchase more than 10% of the voting securities of any single
         issuer;

                                      B-5


         (2) invest 25% or more of its total assets in the securities of issuers
         in any one industry;

         (3) issue senior securities, borrow money or pledge its assets, except
         that the Fund may borrow for temporary or emergency purposes or for the
         clearance of transactions in amounts not exceeding 10% of the value of
         its total assets (not including the amount borrowed) and will not
         purchase securities while any such borrowings are outstanding, and
         except that the Fund may pledge its assets in connection with writing
         covered call options;

         (4) make real estate mortgage loans or other loans, except through the
         purchase of debt obligations consistent with the Fund's investment
         policies;

         (5) buy or sell commodities, commodity contracts, futures contracts,
         real estate or interests in real estate (other than as described under
         "Portfolio Structure" and "Currency Transactions" under "Investment
         Objective and Policies");

         (6) make short sales of securities or maintain a short position in any
         security;

         (7) buy, sell or write put or call options (other than as described
         under "Portfolio Structure--Investment Objective and Policies--Futures
         and Options");

         (8) purchase securities on margin, except such short-term credits as
         may be necessary or routine for the clearance or settlement of
         transactions;

         (9) act as an underwriter, except to the extent the Fund may be deemed
         to be an underwriter in connection with the sale of securities in its
         portfolio; or

         (10) purchase securities, the sale of which by the Fund could not be
         effected without prior registration under the Securities Act of 1933,
         as amended, except that this restriction shall not preclude the Fund
         from acquiring non-U.S. securities.

         Non-Diversified Status. The Fund is classified as a "non-diversified"
investment company under the 1940 Act, which means the Fund is not limited by
the 1940 Act in the proportion of its assets that may be invested in the
securities of a single issuer. However, the Fund conducts its operations so as
to qualify as a "regulated investment company" for purposes of the Internal
Revenue Code, which relieves the Fund of any liability for Federal income tax to
the extent that its earnings are distributed to stockholders. To so qualify,
among other requirements, the Fund must limit its investments so that, at the
close of each quarter of the taxable year, (i) not more than 25% of the market
value of the Fund's total assets may be invested in the securities of a single
issuer or a group of related issuers and (ii) at least 50% of the market value
of its total assets must be represented by cash, U.S. Government securities, and
other securities, with such other securities limited, in respect of any one
issuer, to not more than 5% of the market value of the Fund's total assets and
not more than 10% of the issuer's outstanding voting securities.

                                      B-6


         The back cover displays a map of Europe on which the several countries
are characterized by lines representing their national borders. The countries of
Central Europe (as defined in the Fund's Revised Investment Policies) and Russia
where the Fund holds investments as of May 9, 2003 are highlighted by the
following popular names in the appropriate parts of the map: Austria, Croatia,
Czech, Hungary, Poland, Russia. The Central European countries and Russia are
shaded orange, the other European countries are shaded green.



                                      B-7




                                      PROXY

                     THE CENTRAL EUROPEAN EQUITY FUND, INC.
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

         The undersigned  stockholder of The Central European Equity Fund, Inc.,
a Maryland corporation (the "Fund"),  hereby appoints Richard T. Hale, Robert R.
Gambee and Joseph Cheung,  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 3:30 P.M.,  New York  time,  on June 24,
2003 at the offices of Deutsche Bank Securities Inc., 31 West 52nd Street, Fifth
Floor Auditorium,  New York, New York 10019, 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 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"  PROPOSALS 2, 3, AND 4 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.

     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES

1.   FOR each of the           WITHHOLD AUTHORITY       FOR all nominees except
     nominees for               as to all listed        as marked to the
     director listed                nominees            contrary below.
     below.

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

                               Fred H. Langhammer
                              Christian H. Strenger
                                Eggert Voscherau
                                 Werner Walbrol

      THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 2

2.   To ratify the appointment by the Board of Directors of
     PricewaterhouseCoopers LLP as independent accountants for the fiscal year
     ending October 31, 2003.

     FOR                      AGAINST                      ABSTAIN

      THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 3

3.   To amend the Fund's investment policies to permit increased flexibility in
     the geographic distribution of the Fund's investments by increasing the
     Fund's ability to invest in Russian securities.

     FOR                      AGAINST                      ABSTAIN

      THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 4

4.   To amend the Fund's investment policies to eliminate the per-issuer
     investment limit.

     FOR                      AGAINST                      ABSTAIN

5.   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.






Please sign here exactly as name appears on 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 another representative capacity, please give the full
title under signature(s).



                                            ------------------------------------
                                                        Signature

                                            ------------------------------------
                                                Signature, if held jointly

                                            ------------------------------------
                                                    Dated: ______, 2003