German Foreign Minister Guido Westerwelle said he was encouraged by Tunisia's progress in making the transition from dictatorship to democracy.
"Tunisia can become a model for transformation in the region if it succeeds in perpetuating the fledgling democratization process," the German Foreign Minister said after talks with Prime Minister Hamadi Jebali of the long-banned moderate Islamist party Ennahda, and the country's new president, Moncef Marzouki.
The Arab Spring uprisings began Tunisia in December 2010.
Westerwelle also addressed western concern over moderate Islamists at the helm of the country. He said Europe must get used to the idea that "there are Islamic-democratic parties just like there are Christian-democratic parties in Europe."
Germany has pledged 32 million euros ($40.77 million) towards establishing democratic institutions in Tunisia over the next two years.
The funds have been earmarked for projects to improve governance, train journalists and modernize education centers.
Boosting trade with North Africa
The visit by the German foreign minister, who was travelling with a delegation of German business leaders, comes almost one year after former President Zine El Abidine Ben Ali's flight into exile on January 14, 2011.
Ben Ali was the first Arab leader to be forced from power by the Arab Spring revolutions.
Tunisia was the last stage on the German foreign minister's visit, which also took him to Algeria and Libya over the weekend. In both countries, he called for democratic reforms and lobbied for increased trade with Germany.
"We are standing on the side of the new Libya," he told reporters in the Libyan capital Tripoli on Sunday.
Westerwelle said the main aspect of cooperation with post-Gadhafi Libya would be economic, but Germany could also help in building democratic structures in Libya.
Author: Dagmar Breitenbach (dpa, AFP)
Editor: Andreas Illmer