New Germany Fund's Board of Directors
Approves Settlement Agreement
Germany Funds

July 30, 2007 – The New Germany Fund, Inc. (the “Fund”) (NYSE: GF) announced today that its Board of Directors (the “Board”) approved the terms of a settlement of the civil class action Daniels vs. The New Germany Fund, Inc. et al., in the U.S. District Court for the District of Maryland. This litigation challenged the validity of the Fund’s director qualification bylaw, which includes a requirement of relevant experience and country knowledge consistent with the Fund’s strategy of investment in German companies. Further details of the litigation can be found in the Fund’s most recent Annual Report and its definitive Proxy Statement, both of which can be obtained on the U.S. Securities and Exchange Commission’s (the “SEC”) website: http://www.sec.gov.

The settlement, which would dismiss the litigation without a change to the bylaw, remains subject to approval by the District Court. Pursuant to the settlement and an agreement with the shareholder group that sought to nominate competing directors in 2005 and subsequent years, the Fund would conduct an in-kind tender offer for 20% of the Fund’s outstanding shares of common stock at 96% of net asset value per share. Payment for shares would be in the form of a pro rata portion of the Fund’s cash and portfolio securities. The Fund’s obligation to conduct the tender offer, as well as the other terms of the settlement, will become effective only after formal notification of the settlement has been sent to shareholders following preliminary approval by the Court and the final judgment and order has thereafter been entered by the Court. The Fund expects to commence the tender offer as soon as practicable after the final order is upheld or no longer subject to an appeal.

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This announcement is not an offer to purchase or the solicitation of an offer to sell shares of the Fund or a prospectus, circular or representation intended for use in the purchase or sale of Fund shares. The tender offer referred to in this announcement will be made only by the offer to purchase and related letter of transmittal. Shareholders of the Fund should read the tender offer statement, when it is available, carefully, because it contains important information on the Fund and the tender offer. Shareholders may obtain the tender offer statement and other filed documents, when available, for free at the SEC's web site at http://www.sec.gov.

The New Germany Fund, Inc. is a non-diversified, closed-end investment company seeking capital appreciation primarily through investment in the Mittelstand – an important group of small and mid-cap German companies. The Fund may invest up to 35% of its assets in large cap German companies, and up to 20% in other Western European companies. Its shares are listed on the New York Stock Exchange under the symbol “GF”.

The Fund is not diversified and may focus its investments in certain geographic regions, thereby increasing its vulnerability to developments in that region. Investing in foreign securities presents certain unique risks not associated with domestic investments, such as currency fluctuation, political and economic change, and market risks. This may result in greater share price volatility.

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.