INTRODUCTION: United States Vice-President Walter Mondale me Portuguese Prime Minister Mario Soares in Lisbon on Monday (16 May) on the first official engagement of his European tour. Mr. Mondale, on his second tour of the area since becoming Vice-President in January, is visiting 10 countries in five days.

SYNOPSIS: At their meeting in the Portuguese capital, Mr. Mondale told Dr. Soares that the United States admired Portugal's move towards democratic rule since the 1974 revolution, which ended nearly half a century of rightwing dictatorship. Earlier, Mr. Modale told reporters "no nation has moved more dramatically towards democratic rule and justice" than Portugal.

The two men discussed a proposed international financial loan for Portugal sponsored by the United States, and the modernisation of the Portuguese armed forces. The latter is necessary for Portugal to meet its commitment to the North Atlantic Treaty Organisation -- NATO -- of which the United States is a senior member.

Among other topics discussed in general terms were the forthcoming conference on European security and co-operation in Belgrade, Yugoslavia, and United States use of the Lajes air base in Portugal's Azores islands. Dr. Soares is seeking increased payment for allowing U.S. aircraft to land there, but he stressed it was only a technical matter and that continued operation of the base was not in question.