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TUNIS, Tunisia - France's president told Islamist-led Tunisia on Friday it was heading in the right direction, drawing a positive contrast with countries like Libya and Egypt.
President Francois Hollande said Paris would provide 500 million euros ($645 million)in loans and grants to support the North African state. Sixty million euros of Tunisian debt would also be converted into investment projects.
Tunisia's democratic transition was "a model in the region", Hollande said.
"You are heading in the right direction. In Libya the transition has been tainted by violence; in Egypt the transition was stopped after the removal of the elected president; and in Syria, desire for change led to war", he added.
Hollande said Islam and democracy were "on the same path" and France would not impose lessons on its former colony.
Hollande is on the first visit to Tunisia by a French head of state since the 2011 revolution that toppled President Zine El Abidine Ben Ali and launched Arab Spring uprisings across the region.
Tunisia, now ruled by an Islamist-led government, has voiced condemnation of Wednesday's military overthrow of Egyptian President Mohamed Mursi and his Muslim Brotherhood, describing it as a coup.
Tunisia's revolution inspired those in Egypt and Libya but it has faced criticism in recent weeks from the European Union, which urged the government to reform its laws on freedom of expression.
The government is led by a moderate Islamist party, Ennahda, but hardline Islamist Salafists are seeking a broader role for religion, alarming a secular elite which fears this could undermine individual freedoms, women's rights and democracy.