Update and Proposed Change of Dividend Policy

European Assets Trust NV
20 December 1999


The following is the text of a letter to be sent to shareholders of European
Assets Trust today: -

20 December 1999

Dear Shareholder,

UPDATE AND PROPOSED CHANGE OF DIVIDEND POLICY 

The Supervisory and Management Boards have been concerned for some time at the
level of discount at which the Company's shares trade in the market and have
investigated various means of addressing this.  As a Dutch-registered company,
we have found, for instance, that the practice of investment trusts in the UK
buying back their own shares to counter the imbalance of supply and demand is
not tax-effective due to the requirement to deduct Dutch dividend withholding
tax from any payments made to shareholders.  I have previously advised that
other more radical proposals, such as reconstruction or merger with another
company, met similar fiscal obstacles.  

In the second week of December, Dresdner Bank indicated that it intended to
make offers for a number of Dutch investment companies and these incorporate a
negotiated tax settlement.  This development has caused us to seek further
clarification of the tax position of the Company from the fiscal authorities,
notwithstanding the fact that the outcome of these intended offers remains
uncertain.  The purpose of the approach by the Company's advisors to the Dutch
fiscal authorities is to establish whether the tax arrangement in respect of
the Dresdner offers  may be applied to the Company's situation.

In addition to the Dresdner position there are, as indicated to shareholders
in November, changes to the tax legislation currently under review in the
Dutch Houses of Parliament which, as currently drafted, will affect the
Company as summarised below -

* From 2001, investment companies realising and distributing their revaluation
reserves will be treated as making a distribution of capital, and dividend
withholding tax will no longer arise.
 
* During a transitional period up to and including 2005, companies will suffer
corporate taxation at the rate of 20% on 'excess distributions', defined as
annual distributions in excess of the greater of a 4% return or twice the
average distribution in the three years 1998, 1999 and 2000, under a
consistent dividend policy.
 
* After 2005, investment companies should be able to distribute their assets
freely.

These proposals remain subject to amendment and may be affected by the
Dresdner position. It is expected that the legislation will pass through the
Dutch Lower House of Parliament in January, at which point there should be
greater confidence in its final shape.  This will allow the Boards to define
the flexibility available in relation to a return of capital to shareholders
of the Company, by way of share repurchase or otherwise.

PROPOSED CHANGE OF DIVIDEND POLICY

At the same time, the Board has considered ways of increasing value for
shareholders who want to retain their exposure to European Assets' portfolio. 
The proposed new legislation referred to above, if enacted as drafted, will
enable us to consider a modification of our distribution policy to produce a
tax efficient, high yield in excess of 7.5% per annum for shareholders from
2001 inclusive, funded in part from reserves and with a scrip dividend
alternative for those shareholders who wish to continue to receive their
investment returns principally in the form of capital.  The investment
portfolio would remain unaffected by the distribution policy permitting
continued exposure to smaller European companies in which we have specialised.
 The Company's reserves are sufficient to maintain this level of distribution
until 2006 assuming no capital growth and a maintained portfolio yield.

The modified policy would include a vote on the continuation of the Company in
2006 when, under the draft tax proposals, a full distribution of assets could
be made without tax liabilities arising within the Company.  The Boards
consider that such a high yield policy should prove attractive in the market
and therefore help to narrow the discount.  

I will be contacting shareholders with further details as soon as there is
sufficient clarity of the tax position to allow me to do so.

Yours faithfully



JOHN WARD
Chairman



Enquiries - Howard Myles, Warburg Dillon Read            tel [phone]