Despite the remarks, recorded in a transcript obtained by Reuters, Schliewe was re-elected to Sonneberg's council on Sunday. The AfD won 26% of the vote across the state of Thuringia, up eight points from 2019.

In neighbouring Hildburghausen, a man who sells merchandise featuring Nazi and Ku Klux Klan motifs won 25% and is now in a run-off to become district administrator.

Such events were for decades unthinkable in a Germany so traumatised by the Nazi era that it installed checks and balances to prevent right-wing extremists ever taking power again.

But with a national election next year, and the AfD polling second at around 16%, it must face the fact that right-wing extremism is now widely accepted in the poorer eastern regions such as Thuringia and changing the shape of politics in west Germany too.

Interviews with a dozen local politicians as well as political analysts and a top intelligence official show how the discourse of extremism in Thuringia is being normalised and fomenting anger towards certain groups of society like refugees and climate activists.

The AfD portrays itself as the target of a complacent, self-serving establishment that it stands ready to sweep away.

In its heartland, formerly communist eastern Germany, incomes are lower, mainstream parties are less rooted, and democracy is only three decades old.

The party is suspected of "extremism" by the BfV domestic intelligence agency at national level and certified as such in Thuringia.

Its national surge over the past year, helped by a cost-of-living crisis, has been dented only slightly by a string of scandals.

It made gains on Sunday in district and city councils in Thuringia and reached June 9 run-offs for governing posts in nine districts.

"They are incrementally conquering the lower levels, conquering spaces," said political scientist Oliver Lembcke at the University of Bochum. "And this is possible because in some regions now, people feel freer to support the AfD openly."

As well as rejecting immigration, the AfD is an aggressive opponent of "green" measures to cut fossil fuel emissions, an issue that has spurred farmer protests across Germany and Europe.

NAZI-TYPE LANGUAGE NO LONGER TABOO

Stephan Kramer, head of Thuringia's domestic intelligence agency, said it was normalising the discourse of extremism, defined as attacking the democratic basis of Germany's constitution.

"This leads to further disinhibition and radicalisation in parts of the population," he told Reuters. "Everyday interactions are becoming increasingly aggressive."

Marcel Rocho, 44, owner of a bar in the town of Sonneberg, said an AfD city councillor had once toasted a friend with the Nazi greeting "Sieg Heil!" ("Hail Victory!"). The councillor, who was also re-elected on Sunday, denies the allegations.

"Ten years ago, you might have heard these kinds of greetings in someone's garage - but not in public, like now."

The AfD has not made it into state or federal government as other parties refuse to form a coalition with it.

But it leads surveys ahead of three eastern regional assembly elections in September, including Thuringia. It may not be able to govern afterwards - but already in Thuringia, opposition parties have passed laws with AfD support.

Nationwide, the AfD also has little chance of attaining power next year. But its role in eroding the vote of traditional parties is set to promote more strained and ultimately unpopular alliances of unlikely bedfellows, such as Chancellor Olaf Scholz's current Social Democrat-Liberal-Green coalition, just as, in Kramer's words, "hatred and agitation dominate the political climate of discussion".

"The enemies of democracy are using their democratic rights in the parliaments to delegitimise and destabilise the state by deliberately destroying trust in democracy and its institutions," he said.

Germans often nervously evoke the rise of the Nazis in the weak inter-war Weimar Republic, after the humiliating defeat of the German Reich in World War One and the Great Depression.

Kramer said today's Germany had a much more robust democratic tradition, but there were parallels in the current discontent and erosion of faith in democracy.

RACIST INSULTS AND VIOLENCE ON THE RISE

German authorities are supposed to vet candidates for extremism. Yet critics say they are failing, perhaps because they are complacent, lack resources, fear retaliation - or, more worryingly, because they are themselves increasingly right-wing.

Robert Sesselmann passed his "democracy check" last year after being elected district administrator in Sonneberg with 53%, even though Thuringia's BfV delivered a 10-page dossier on him. It was the first time the AfD had won a governing post.

Once in office, he tried to cut funds for civic education projects including trips for teenagers to the Nazi concentration camp at Buchenwald, four councillors told Reuters. Sesselmann said the district's optional services in particular are being scrutinised due to budget consolidation.

In a speech at an AfD event last October, recorded and posted on Facebook, he said refugees habitually turned to drug dealing or other illegal business when given cash, and so should only get material support instead.

He said it hurt him to spend funds on health because it was not going to "our people" but to refugees who had no health insurance.

Such rhetoric has made life hard for Sonneberg's refugees.

Ukrainian refugee Iryna Holovko, 39, said her daughter had been bullied at school, and added: "I was walking down the street when someone just stuck their middle finger up at me and told me to go back to my country ...

"Then, when I was at the hospital, people were asking why Ukrainians were always sick and needing treatment."

Last year, Sonneberg recorded 20 incidents of right-wing violence, including on refugee shelters, against four in 2022, according to the rights group Ezra.

And Heidi Buettner, former councillor for the Greens in Sonneberg, said a note was pushed through her letterbox calling her a "Dirty Green swine".

Many people are being put off political activity, Thuringia Greens chief Max Reschke said.

Mainstream parties are struggling to engage younger people, and fielded fewer candidates in Thuringia's local elections this year than in 2019.

Meanwhile the AfD, only 11 years old, has been expanding, and fielded 44% more candidates.

"We are seeing a clearing-out of established political culture," said political scientist Lembcke. "Meanwhile, the AfD doesn't face as much stigma anymore and is filling the void."

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