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France Still Attractive, Despite SocGen Scandal

The French economy still provides an attractive arena for international investment, Philippe Favre, president of Invest in France, told "Squawk Box Europe" Thursday, despite the recent trading scandal at Societe Generale.

The sectors with a positive outlook in France include logistics, pharmaceuticals, IT and research & development, according to Favre.

"R&D for a very simple reason, we have good engineers (and) a very good tax credit on R&D and we're seeing already the impact of this measure," Favre told CNBC Europe.

Among the various sweeping reforms introduced by French President Nicolas Sarkozy's government, an attempt has been made to reverse declines in R&D spending.

The government recently widened the scope for a tax credit including more eligible expenditures for the calculation of the credit, to boost spending on research and development.

The tax credit will be 50 percent in the first year, 40 percent in the second year and 30 percent from then on. The scheme is already producing results, according to Favre.

The International reputation of France won’t be damaged by last week’s scandal at French baking giant SocGen, Favre said, because the French banking system is quite healthy.

"Even SocGen, despite a massive writedown of 5 billion (euros), will be profitable in 2007," he said.

The image of France has improved recently due to Sarkozy scrapping the 35 hour week, Favre added.