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The Germany Funds

The Germany Funds. Annual Shareholder Meeting. June 28. 2010. Important Notes:.

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The Germany Funds

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  1. The Germany Funds Annual Shareholder Meeting June 28. 2010

  2. Important Notes: • Closed end funds. unlike open end funds. are not continuously offered. There is a one time public offering and once issued. shares of closed end funds are sold in the open market through a stock exchange. Shares of closed-end funds frequently trade at a discount to net asset value. The price of the fund's shares is determined by a number of factors. several of which are beyond the control of the fund. Therefore. the fund cannot predict whether its shares will trade at. below or above net asset value. • Past results of the markets as discussed in this presentation are not necessarily indicative of future performance of those markets. • The European Equity Fund, Inc. (EEA) and the New Germany Fund, Inc. (GF) are subject to investment risks. Investing in foreign securities, particularly those of emerging markets, presents certain risks, such as currency fluctuations, political and economic changes, and market risks. Any fund that concentrates in a particular segment of the market will generally be more volatile than a fund that invests more broadly. • References to securities. transactions and holdings should not be considered a recommendation to purchase or sell a particular security and there is no assurance. as of the date of publication. that the securities remain in the portfolio. Additionally. it is noted that the securities or transactions referenced do not represent all of the securities purchased. sold or recommended during the period referenced and there is no guarantee as to the future profitability of any of the securities identified and discussed herein. We or our affiliates or persons associated with us. or such affiliates (associated persons) may maintain a long or short position in securities referred to herein. or in related futures or options; purchase or sell. make a market in. or engage in any other transaction involving such securities. and earn brokerage or other compensation in respect of the foregoing.

  3. Important definitions S&P 500 is an index that represents the US equity market in general. NASDAQ 100 is an index that tracks the includes 100 of the largest domestic and international non-financial securities listed on The Nasdaq Stock Market based on market capitalization. FTSE 100 is an index representing the 100 most highly capitalised UK companies listed on the London Stock Exchange. DAXis a total rate of return index of 30 selected German blue chip stocks traded on the Frankfurt Stock Exchange. CAC is a market-capitalization-weighted index of the 40 most actively traded stocks on the Paris Bourse. TOPIX (Tokyo Price Index) is an index that measures stock prices on the Tokyo Stock Exchange. HANG SENG is a market capitalization-weighted stock market index in Hong Kong and is the main indicator of the overall market performance in Hong Kong. China A-Share refers to an index that measures the performance of companies listed on the Shanghai Stock Exchange. A-shares are quoted in yuan, and are only available to foreign investment through a qualified program. MSCI EMU(European Economic and Monetary Union) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of countries within EMU. Euro Stoxx 50 Index is a market capitalization-weighted stock index of 50 large, blue-chip European companies operating within eurozone nations. Stoxx 50 Index is a stock index representing 50 of the largest companies in Europe based on market capitalization. Closely resembles the EURO STOXX 50 in methodology and construction, with the exception that it does not limit company selection to companies that have fully transitioned to the euro currency. Midcap Market Performance Indexis a total return index that is composed of various MDAX and TecDax issues, reflecting the performance of the mid-caps across all sectors of the Prime Segment. Index performance includes reinvestment of all distributions and does not reflect fees or expenses. It is not possible to invest directly in an index. Page 3

  4. Important definitions EURIBOR (Euro Interbank Offered Rate) is the rate at which euro interbank term deposits within the euro zone are offered by one prime bank to another prime bank. OECD refers to the Organisation for Economic Co-Operation and Development. ISM refers to the Institute for Supply Management. CPI (Consumer Price Index) is a standard measure of inflation. GDP (Gross Domestic Product) is a measure of a country's overall economic output. Repo rate is the agreed upon rate for money market repurchase agreements. EPS (Earnings Per Share) is the portion of a company's profit allocated to each outstanding share of common stock. PMI (Purchasing Managers Index) is an indicator of manufacturing sector economic health. Beta is a quantitative measure of the volatility of a given mutual fund, or portfolio, relative to the overall market. MUICP (Monetary Union Index of Consumer Prices) is an average measure of inflation for all countries located in the Eurozone. Bund is the German government’s federal bond.. EBIT (Earnings Before Interest and Taxes), or operating income, is a measure of profitability that excludes interest and taxes EV/EBITDA (Enterprise Value / Earnings Before Interest, Taxes, Depreciation and Amortization), or Enterprise Multiple, is a ratio used to determine the value of a company. Page 4

  5. The Germany Funds Overview of Management Setup Rainer Vermehren. Portfolio Manager • Portfolio manager for Emerging Markets Equity: Frankfurt • Joined DWS in 1997 after 3 years of experience as assistant to fund manager in Latin American equities at Morgan Stanley. New York • BA from University of Maryland; MBA from Fordham University Updated: May 2010

  6. Development of global markets Source: Bloomberg As of June 2010

  7. 2009 has been the sixth recession year in a row with strong DAX performance As of April 30, 2010 Source: Thomson Reuters Datastream, Commerzbank (data untill 1991), Organisation for Economic Co-Operation and Development (OECD) Economic Outlook Marked: Recession years in Germany * OECD GDP estimates

  8. Growth and inflation forecasts As of April 26, 2010 Source: DB Global Markets Research

  9. Economic environment – macro themes • Europe: • Fiscal Crisis – north vs. south – core vs. periphery • Austerity measures gaining pace – slowed growth • EUR weakness – vs. US Dollar and Japanese Yen • Industrial Production suggests recovery (exports) • USA • Recession ended in July 2009 • Steady recovery underway • Emerging Markets • GDP growth powering on • Driving global demand • China’s oil imports rose 29% YoY in 2010 YTD

  10. Investment Strategy • End of Q1 data confirm a sustainable global expansion • Rising profits and asset prices are prompting firms to turn towards growth strategies (including new hires) • The sovereign debt crisis particularly in the Eurozone will stay with us for many years to come • The differentiating factor between the Eurozone debt problem and the US/UK debt problem is the ability/willingness to print money • Central banks delaying the necessary hikes due to negative sovereign debt dynamics (Q4 2010?)  prolongation of the liquidity rally, New asset bubbles building. • Due to expected earnings growth of 15% - 20% (2011) the valuation of Equities is still very cheap (S&P 500, DAX 30 and Hang Seng indices all have PE’s around 12)

  11. Investment Themes at DWS – in broad terms • Last Year's Investment Themes: • Cyclicals • Small and Mid-Cap stocks • Sectors: Cyclicals, Energy, Industrials, Materials, Oil Service • Regions: Emerging Markets. • Current Investment Themes: • Defensives / High dividend payers • Large Cap stocks • Sectors: Industrials, Pharma, Staples, Telecoms and Utilities • Regions: Emerging Markets, Core Developed

  12. The European Equity Fund Gerd Kirsten, CFA, Managing Director   • Head of Institutional Equities, Europe: Frankfurt • Joined the Company in 2009. Previously, 1990 - 1999 worked in New York for HVB Capital, the US investment bank of Hypovereinsbank and 1999 - 2004 with Deka Investment as senior portfolio manager, where he built the Small Cap Team, 2004 - 2009 Partner and Managing Director of F&V Vermoegensverwaltung AG and fund manager of the innovative Dynamic Europe Fund. • MBA in Finance from Columbia University, New York and Diplom-Kaufmann in Banking from Technical University, Berlin.

  13. The European Equity Fund (EEA) Performance (in % USD) Performance information All performance shown is historical. assumes reinvestment of all dividend and capital gain distributions. and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions. so that. when sold. shares may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. Please visit www.eeafund.com or call (800)GERMANY and speak to a representative to obtain the fund’s most recent performance. Average Annual Total Returns as of 5/31/10 Market Value Net Asset Value Benchmark* 1-Year 4.34 0.65 -2.31 3-year -20.53 -18.63 -17.23 5-year -1.55 -1.53 0.30 10-year -4.42 -3.85 -1.69 Life of fund 5.29 5.87 6.66 Cumulative Returns as of 5/31/10 Market Value Net Asset Value Benchmark* YTD -20.15 -19.91 -20.76 1-month -11.91 -13.29 -13.14 3-month -8.16 -8.60 -10.97 Inception date 7/23/86 7/23/86 n/a Total return based on net asset value reflects changes in the fund’s net asset value during each period. Total return based on market value reflects changes in market value. Each figure assumes that dividends and capital gains. if any. were reinvested. These figures will differ depending on the level of any discount from or premium to NAV at which the fund’s shares traded during the period. Returns during part or all of the periods shown reflect a fee and/or expense waiver. Without this waiver. returns would have been lower and any rankings/ratings might have been less favorable. If a voluntary fee waiver is applicable. it may be terminated or adjusted at any time without notice. *As of November 1. 2005. the benchmark is the MSCI EMU Index. Prior to November 1. 2005. the benchmark was the DAX Index. See slide #3 for index definitions. Index returns assume reinvestment of distributions and do not reflect fees or expenses. It is not possible to invest directly in an index.

  14. The European Equity Fund (EEA) Top 10 Holdings Updated: May 30, 2010

  15. The European Equity Fund (EEA) Industry Sector Breakdown1 Relative Weights Portfolio Weight % Overweight / Underweight in % 1 MSCI EMU Index Sector Scheme. See slide #3 for index definition. Updated: May 2010

  16. The European Equity Fund (EEA) Country Breakdown Relative Weights Portfolio Weight % Overweight / Underweight in % Updated: May 2010

  17. The European Equity Fund (EEA) Economic Scenarios • Last Year's Economic Themes: • Expansive Central Bank Policies • Germany and France emerged out of recession • Excess Liquidity on the sidelines • Current Economic Themes: • Weakening Euro • Expansive Central Bank Policies due EURO fiscal crisis • Improving Industrial Production trend • Exporters benefiting from weaker Euro

  18. Eurozone economic review Repo rate and 3-month EURIBOR Eurozone GDP and ifo business climate index Eurozone MUICP and core inflation rate German interest rates 2-year/10-year yield curve spread Spreads versus German Government Bonds Source: Thomson Reuters Datastream

  19. The European Equity Fund (EEA) Peripheral Europe: Yield curvesTerm structure (in %) in relation to Germany Italy Spain Greece Ireland Source: Thomson Reuters Datastream

  20. The European Equity Fund (EEA) European equities – relative valuation Dividend yield to Bund (in %) Source: Institutional Brokers Estimate System (IBES), Thomson Reuters Datastream Performance is historical and does not guarantee future returns.

  21. The European Equity Fund (EEA) European financing needsGreece. Italy need to speed up issuance activity Bond issuance activity 2010 • Greece did three benchmark transaction in the capital market 2010; needss further capital till the end of May • Italy is lying behind schedule in issuance. which is concerning given the huge financing needs of EUR 250 bn • The Netherlands. Austria and esp. Ireland are well on track. with the latter having done 1/3 of full 2010 issuance in January As of March 31. 2010 Source: DB Advisors. UBS

  22. The European Equity Fund (EEA) Europe – absolute earnings Euro Stoxx 50 earnings Stoxx 50 earnings The forecasts expressed are as of June 7, 2010. There is no guarantee that the forecasts expressed herein will come to pass. Source: IBES, Thomson Reuters Datastream, DB Advisors Performance is historical and does not guarantee future returns.

  23. The European Equity Fund (EEA) Companies continued to beat earnings estimates ... • An increasing number of companies could beat consensus estimates and confirm the improving environment European earnings season (net % companies beating estimates) vs. MSCI Europe As of May 5, 2010 Source: UBS, IBES Performance is historical and does not guarantee future results.

  24. The European Equity Fund (EEA) Margins recovered, revenues started to follow Earnings vs. revenue surprises (company count) in % Earnings vs. revenue surprises (market cap weighted) in % As of May 5, 2010 Source: UBS, IBES, MSCI

  25. The European Equity Fund (EEA) Manufacturing PMI* & Industrial Production • Recovery on track – slowdown possible *Purchasing Managers Index.Source: Capital Economics, June 2010

  26. The European Equity Fund (EEA) Euro-Zone Industrial Production • Improving Trend YTD Source: Capital Economics, June 2010

  27. The European Equity Fund (EEA) Investment Themes Last Year's Investment Themes: • Cash-for-clunkers • Switch into cyclicals • Financials "back to normal" • Emerging Markets early recovery Current Investment Themes: • Emerging Markets Watch China for potential overheating • Commodities Oil now also moving • Earnings Substantial Momentum • Own "North" not "South" / Own "Core" not "Peripheral"

  28. The European Equity Fund (EEA) Peripheral Europe: 10-year spread vs. Bund Source: Thomson Reuters Datastream Performance is historical and does not guarantee future results.

  29. The European Equity Fund (EEA) Top & bottom holdings relative to index Updated: May 2010

  30. The European Equity Fund (EEA) Balance between cyclicals and staplesHenkel • Company profile: • Cyclical: Co. manufactures industrial, and consumer chemical products, adhesives and more. • Staples: Co. manufactures soaps, skin care products, hair dyes, perfumes, detergents, and more. • Co. is #1 in categories / markets representing 26% of sales. …#2 representing 57% of sales. • Why we like it: • Benefits from the weaker Euro • Sustainable top line growth • Market leader in many of the markets it serves • Catalysts: • Best value / growth proposition in the European Home Personal Care (HPC) segment. • Co. displaying the highest 3-year EPS CAGR* (27%) among European HPC peers. • Henkel is undervalued vs. peers both on 2010 and 2011 figures. *CAGR is the compound annual growth rate. Updated: June 2010

  31. The European Equity Fund (EEA) The luxury demand puzzleLVMH – Where double digit growth is not a function of the cyclical recovery • Company profile: • Unparalleled portfolio of brand franchises which includes: Vuitton, Dior, Givenchy, Veuve Cliquot, Hennessy, Tag Heuer, Zenith • Unrivalled global footprint in the industry • Strong top management with a long and successful track record of M&A • Sources of long-term structural growth: • Plutonomy effect within societies with the rich spending more on quality and brand • Emerging market consumers will continue to generate 80% – 90% of the growth in the sector for the next three years (currently ca. 35% of sales) • Branding trend in consumer products offering pricing power to market leaders with best recognition and distribution network • Catalysts: • Double digit sales growth in fashion and leather goods against tough comps • Annual General Meeting in mid-April when the CEO lays out his vision for the sector and the company's outlook • Further growth in analyst earnings upgrades Updated: June 2010

  32. The European Equity Fund (EEA) Top innovation playSoftware AG 2.7%* • Market cap: EUR 2.7 billion • Sector: Software • Global #3 provider of software integration platforms (webMethods) and the leading provider of Business Process Management software (Aris/IDS Scheer) • High profitability (2010E: EBIT margin c23%) and high visibility with c70% of sales being recurring • Future growth comes from: Innovation. geographic expansion. and cross selling synergies from past acquisitions. • High earnings growth from continued increase in efficiency and cost reductions. while successfully integrating IDS Scheer. lifting EBIT* margins. • Attractive valuation at 14.6x PE 2011e. *Earnings before interest and taxes Updated: May 2010

  33. The New Germany Fund Petra Pflaum, CEFA, Managing Director      • Senior portfolio manager for German and European Small / MidCaps: Frankfurt • Joined DWS European Small and Mid-Cap team in 2002 after joining DB Advisors' equity investment management team in 1999. From 1996 - 1998 she was a research analyst for retail and consumer goods at BHF-Bank Frankfurt. • Degree in Business Administration ("Diplom-Betriebswirtin"). Technical University of Trier; one year at University of St. Thomas. USA; completed bank training program ("Bankkauffrau") at BHF Bank, Frankfurt

  34. The New Germany Fund (NGF) Performance (in % USD) Performance information All performance shown is historical. assumes reinvestment of all dividend and capital gain distributions. and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions. so that. when sold. shares may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. Please visit www.newgermanyfund.com or call (800)GERMANY and speak to a representative to obtain the fund’s most recent performance. Average Annual Total Returns as of 5/31/10 Market Value Net Asset Value Benchmark* 1-Year 29.65 17.72 15.81 3-year -12.41 -11.00 -12.96 5-year 7.24 7.32 5.60 10-year 1.85 0.77 -0.79 Life of fund 2.95 4.84 2.58 Cumulative Returns as of 5/31/10 Market Value Net Asset Value Benchmark* YTD -7.09 -10.10 -11.90 1-month -13.90 -12.55 -12.21 3-month -1.77 -4.28 -5.19 Inception date 1/30/90 1/30/90 n/a Total return based on net asset value reflects changes in the fund’s net asset value during each period. Total return based on market value reflects changes in market value. Each figure assumes that dividends and capital gains. if any. were reinvested. These figures will differ depending on the level of any discount from or premium to NAV at which the fund’s shares traded during the period. Returns during part or all of the periods shown reflect a fee and/or expense waiver. Without this waiver. returns would have been lower and any rankings/ratings might have been less favorable. If a voluntary fee waiver is applicable. it may be terminated or adjusted at any time without notice. * Midcap Market Performance Index. See slide #3 for index definitions. Index returns assume reinvestment of distributions and do not reflect fees or expenses. It is not possible to invest directly in an index.

  35. The New Germany Fund (NGF) Top 10 Holdings Updated: May 30, 2010

  36. The New Germany Fund (NGF) Industry Sector Breakdown1 Relative Weights Portfolio Weight % Deviation in % points from benchmark 1 MSCI SectorScheme Updated: May 30, 2010

  37. The New Germany Fund (NGF) Investment Themes Last Year's Investment Themes: (same as this years) • “Die Abwrackprämie” – Germany’s most popular export good • Cyclical Recovery (more beta) / alternative energy / materials • Restructuring / Integration • Exposure to Asian growth markets Current Investment Themes: • Automotive industry (ongoing cyclical recovery) • Restructuring / Integration • Exposure to Asian growth markets • US$ profiters / Industrials (Exporters)

  38. The New Germany Fund (NGF) German equities – relative valuation Dividend yield to Bund (in %) Source: IBES, Thomson Reuters Datastream Past performance does not guarantee future results.

  39. The New Germany Fund (NGF) Top & bottom holdings relative to index Updated: May 30, 2010

  40. The New Germany Fund (NGF) Top key convictionsSoftware AG 2.7%* • Market cap: EUR 2.7 billion • Sector: Software • Global #3 provider of software integration platforms (webMethods) and the leading provider of Business Process Management software (Aris/IDS Scheer) • High profitability (2010E: EBIT* margin c23%) and high visibility with c70% of sales being recurring • Future growth comes from: Innovation, geographic expansion, and cross selling synergies from past acquisitions. • High earnings growth from continued increase in efficiency and cost reductions, while successfully integrating IDS Scheer, lifting EBIT* margins. • Attractive valuation at 14.6x PE 2011e. *Earnings Before Interest and Taxes. Updated: May 2010

  41. Top key convictionsWacker Chemie 2.4%* The New Germany Fund (NGF) • Market cap: EUR 5.8 billion • Sector: Chemicals • Wacker is a world leading supplier of silicon for the photovoltaic industry, among the global suppliers of semiconductor grade silicon, and an important regional provider of polymers, silicon and fine chemicals. • In photovoltaic silicon, Wacker benefits from an excellent cost position, still tight supply-demand dynamics and market growth from e.g. Germany and Italy. • The polymer division should see growth 2010 and its semiconductor unit should see a significant earnings swing. • Management already guided for a strong Q1, based on improving fundamentals in all divisions. • Attractive valuation at an EV/EBITDA* est. of 2010 of 5.8x. vs. REC (Renewable Energy Corp) at 11.4x. *Enterprise Value / Earnings Before Interest, Taxes, Depreciation and Amortization. Updated: May 2010

  42. The New Germany Fund (NGF) Top key convictionsLanxess 5.3%* • Market cap: EUR 3.1 billion • Sector: Chemicals • Lanxess is one of the leading special chemicals companies, focused on premium products like special plastics and rubber. • After Lanxess already surprised with very good Q1 results, management has guided for a strong Q2 as well. Especially Performance Polymers (c48% of total sales) excelled, with +85% growth driven by strong demand from Brazil, China and India and a positive YoY development of natural rubber prices. Further, Lanxess bringing forward the completion of its world scale (100,000 tones) rubber plant in Singapore and the anticipating increasing demand on the back of several global tire labeling initiatives (e.g. EU, North America, Japan) bodes well for future growth. • Attractive valuation of 11.3x PE and 5.4x EV/EBITDA* based on IBES 2011 estimates, while showing a clear upward trend in earnings expectations, up almost 150% in the last nine months. *Enterprise Value / Earnings Before Interest, Taxes, Depreciation and Amortization. Updated: May 2010

  43. The Germany Funds Annual Shareholder Meeting June 28. 2010

  44. E E A Discount trend EEA Fund's share price discount to net asset value and trend line

  45. Discount trend GF Fund's share price discount to net asset value and trend line All performance is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when sold, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please visit www.dws-investments.com for the fund’s most recentperformance.

  46. Discount trend CEE Fund's share price discount to net asset value and trend line All performance is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when sold, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please visit www.dws-investments.com for the fund’s most recentperformance.

  47. IMPORTANT – PLEASE NOTE

  48. IMPORTANT – PLEASE NOTE (continued) • This presentation shall not constitute an offer to sell or a solicitation to buy. nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction. • The sources. opinions and forecasts expressed are as of June 28, 2010. There is no guarantee that the views opinions and forecasts expressed herein will come to pass. This information is subject to change at any time based upon market and other conditions and should be construed as a recommendation for any specific security. Past performance does not guarantee future results. For Further Information please call Investor Services at 800-GERMANY Or visit us on the web at www.germanyfund.com This presentation is provided for informational purposes only and is not intended for trading purposes. R-4804-3 (6/10) NOT FDIC/NCUA INSURED MAY LOSE VALUE NO BANK GUARANTEE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

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