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                                                                Media Relations:
                                                                Erica Platt
                                                                (212) 762-3268




MORGAN STANLEY                                             FOR IMMEDIATE RELEASE


           MORGAN STANLEY EASTERN EUROPE FUND, INC. ANNOUNCES THAT IT
               WILL CONCENTRATE IN THE ELECTRIC UTILITIES INDUSTRY

NEW YORK, November 1, 2006 - Morgan Stanley Eastern Europe Fund, Inc. (NYSE:
RNE) (the "Fund") announced today that its Board of Directors has determined
that it is appropriate for the Fund to invest more than 25% of its assets in
securities issued by companies in the electric utilities industry of Eastern
European countries. Therefore, the Fund may be exposed to increased investment
risks related to the electric utilities industry, including high interest costs
in connection with improvement programs; difficulty in raising capital on
reasonable terms in periods of high inflation and unsettled markets;
governmental regulation of customer rates; costs associated with compliance with
and changes in environmental and other regulations; effects of economic
slowdowns; increased competition from other providers of electric utility
services; costs associated with reduced availability of certain types of fuel,
occasionally reduced availability and the effects of energy conservation
policies, and the potential that costs incurred by the electric utility change
more rapidly than the rate the utility charges its customers is permitted to
change; and the effects of a national energy policy and lengthy delays and
greatly increased costs and other problems associated with the licensing,
regulation and operation of nuclear facilities for electric generation,
including technological innovations that may render existing plants, equipment
or products obsolete.

Morgan Stanley Investment Management Inc. is the Fund's investment adviser. The
Fund is a non-diversified, closed-end management investment company, the shares
of which are listed on the NYSE (RNE). The Fund's investment objective is
long-term capital appreciation, which it seeks to achieve by investing primarily
in equity securities of Eastern European country issuers and in debt securities
issued or guaranteed by Eastern European country governments or governmental
entities.

Morgan Stanley Investment Management, together with its investment advisory
affiliates, has over 400 investment professionals around the world and more than
$448 billion in assets under management or supervision as of August 31, 2006.
These entities offer investment management




services to a diverse client base, which includes governments, institutions,
corporations and individuals.

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing
a wide range of investment banking, securities, investment management, wealth
management and credit services. The Firm's employees serve clients worldwide
including corporations, governments, institutions and individuals from more than
600 offices in 30 countries. For further information about Morgan Stanley,
please visit www.morganstanley.com

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