Summary

Although political instability in Southeastern Europe persists, countries are slowly coming to a broad-based commitment to reform what also shows up as a revitalization of economy in the area and its performance. For the economic development of Slovenia, these countries are of a vital importance. This is due to naturally (geographically) and historically (culturally, linguistically) given facts. The competitive advantages will in the long run undoubtedly outweigh the existing challenges.

This paper will give a broad overview of the dynamics of the Pact for Stability and the position that Slovenia has in it, as well as, chances and direction towards the development of the level of present economic situation. This is can be reached by intensifying the outward FDIs to the region, backed up by an adequate support with governmental services.

The Balkan Stability pact works well for Slovenia, so far. That is so, because EU is paying special attention to the region and making efforts to entrench peace and stability through the creation of economic relationships throughout the region. This is important, because long-term prospects for the region will ultimately be dependent on the relationships, which develop between the states of the Balkans.

Key words: pact for stability, foreign trade, FDIs, competitiveness, development.