On a sunny September afternoon in Stockholm, people stroll along the Strandvägen waterfront on a Lou Reed-certified perfect day.

Were it not for the anti-Nazi demonstration on the square named after Raoul Wallenberg, the Swedish diplomat who lost his life saving Hungarian Jews in the Holocaust.

Seven decades after he disappeared, and days before Swedes elect a new government, what would one of their national heroes make of the sign reading “No Space For Nazis”?

It is a question that student couple Charlotte and Lars are asking themselves, too. “It’s insane that we have to be here, protesting against Nazis,” says Charlotte, looking a little embarrassed in the huge crowd of all ages. “But we were all caught out last weekend, and felt we had to show our face today.”

A week previously, more than 200 supporters of the neo-Nazi Nordic Resistance Movement staged a six-hour rally in Stockholm, chanting slogans and waving the organisation’s green-and-white flags.

Their march, protected by Swedish police, attracted about 200 counter-demonstrators. An animal rights march at the same time in the capital attracted 500 people. Shocked, thousands of Swedes have gathered a week later here in the dying days of an election campaign dominated by extreme positions alien to most locals.

Taking to the stage at the anti-Nazi demonstration is Livia Fränkel, who survived Josef Mengele and Auschwitz. Her simple warning: beware the beginnings.

“We ended up in Sweden where we started a new life and thought we had found security and happiness – and perhaps we have done so,” she said. “But that security has begun to sag, Nazis are once again marching through our streets. They’re spreading their evil again to finish what Hitler started, but we will not let them.”

The crowd cheers, many with tears in their eyes. They are crying for her, and themselves.

Familiar problems

Burdening this prosperous Nordic country are problems familiar elsewhere in the world: immigration and globalisation, and the struggles of mainstream politicians to provide answers to both.

The party claiming to have all the answers here is the far-right Sweden Democrats (SD). Founded 30 years ago by ex-Nazis, it is now growing exponentially: almost 6 per cent in the 2010 election, 12.9 per cent in 2014. Since the 2015-2016 refugee crisis, when Sweden took in more people per capita than any European country, the SD is nearing 20 per cent.

Analysts say many Swedes will back the SD less out of conviction than frustration with the political mainstream and their struggle to tackle – even discuss – glaring problems that have risen in parallel with the influx of new arrivals.

Around the corner from the anti-Nazi march is Stockholm’s great synagogue, built in 1870, with the Hebrew inscription on the facade: “And make Me a sanctuary that I may dwell among them.”

Aron Verständig, chairman of the Jewish community in Sweden, says the refugee crisis catalysed pre-existing problems and has played into the hands of the political fringes.

Counter-demonstrators gather during a neo-Nazi rally in Kungsholmstorg square in Stockholm, Sweden. Photograph: Fredrik Persson Sweden Out/EPA

A watershed moment came last December, he says, when a Hanukkah party at a Gothenburg synagogue was interrupted by Molotov cocktails, thrown by two Palestinians and a Syrian, aged between 18 and 24.

Two days later, firebombs were discovered outside the Jewish burial chapel in the southern Swedish city of Malmö.

Also last December, at a Stockholm protest against the US recognition of Jerusalem as the capital of Israel, participants were heard promising to “shoot the Jews” while a speaker called Jews “apes and pigs”.

Swastikas

In the northern Swedish city of Umea, a Jewish community centre closed last year after swastikas and messages daubed on its walls reading: “We know where you live.”

For Sweden’s 18,000 strong Jewish community, particularly those outside the relative safety of Stockholm, these are times of concern. And yet, paradoxically, of hope.

“Until last year’s attacks politicians here believed if you are an immigrant you are an underdog and can never be a racist, that the only racists are privileged white Swedish males,” said Verständig, Stockholm’s Jewish community chairman.

No more: Social Democrat prime minister Stefan Löfven led the condemnations of that attack, conceding that he and others had been naive to the threat in their midst from immigrants raised in homelands where anti-Semitism is the norm.

Importing that problem has activated Sweden’s immune system, forcing society here to confront realities that it chose not to see until now. That, in turn, has energised the battle against the latent, native anti-Semitism hiding behind the far-right Sweden Democrats’ carefully curated facade of respectability.

In its latest scandal: a party MP has come under fire for a Facebook photo-montage of Anne Frank in a white hoodie, carrying the slogan: “Coolest Jew in the Shower Room.”

“Swedes were very naive, but now they are less so,” suggested Verständig of Stockholm’s Jewish community. “This is still, by and large, a functioning and safe society, also for Jews. But the process of waking up – and growing up – is ongoing.”

Part 1 of a series. Tomorrow: Immigration and the challenge of integration in Sweden.