Since 2000 the Congress of Local and Regional Authorities of the Council of Europe has been organising the annual Forum of Cities and Regions of South-East Europe with the aim of contributing to the development of local democracy in the region and of promoting the exchange of experiences with their European partners.In October 2004 the Budva Forum proposed solutions to improve the socio-economic and financial situation of local authorities in the region, creating recommendations in the fight against corruption at local level and for the development of tourism which respects the environment.This publication gives an account of the debates of the 5th Forum.