Under Angela Merkel’s refugee policy, Germany has taken more than a million new arrivals in 12 months. But this huge undertaking has exposed old tensions. Thousands of alienated Germans are joining virulent anti-immigration movements, especially in the former East. What happens now?

You hear the police before you see them. It’s the sound of all that riot gear moving. I heard officers complain about the soreness, now that they have to put it on every week.

It’s all-black, real dystopian sci-fi chic, somewhere between sports apparel and medieval armour, with articulated knee pads and visors. It clicks and rubs whenever the cops start running, the first portent of trouble.

Violence in a crowd has a way of being hard to pick out, so this sound, this rumble, becomes something to avoid. It’s dark early in late October.

The police are silent in the middle of shouting crowds, but audible because there are so many of them. Their dozens of empty vans can be lined up, bumper-to-bumper, to act as barricades, fencing off the centre of Dresden.

This metal ring has turned the central Theaterplatz into a kind of stadium. We are funnelled through a small number of entrances, where counter-demonstrators have set themselves at close range. The flags and placards and the indistinct energy that comes with thousands of people heading to the same place makes it feel like a football game, with the anti-fascists the away fans.

Dresden's “anti-fas” have a reputation as brawlers; Black Bloc types who see physically intimidating skinheads and hooligans as part of their job. The anti-migrant protestors have to run their gauntlet, very close to a front line of faces covered with mufflers. Behind a flag with a snarling wolf standard on it, the anti-fas seemed to be only just restraining themselves from rushing the rival attendees.

'Nipsters' are 'Nazi hipsters' who make online vegan cooking videos and wear Converse instead of steel cap boots.

This straggle is punctuated by firecrackers: big, ugly bungers, that go echoing around the claustrophobic alcoves, loud enough to sound like bombs. Loud enough to make everyone in the vicinity in jump – and to bring the police running.

Most of the anti-migrant attendees look okay. Very late middle-aged, with that denimy East German look: single earrings, flattops, a fashion that still carries a bit of 1989 about it. They’re surly, yet on their best behaviour. But there is a more menacing, thuggish vein laced throughout the crowd.

“You will know who to steer clear of”, a friend said beforehand as we prepped, and it was soon clear. Skinheads with gauge earrings. Shoulder-to-shoulder hooligans in big jackets, with the same kind of blank expressions you see on strip club patrons.

Why Dresden? Hear from Professor Hans Vorländer, Director of the Institute for Political Science at Dresden Technical University.

The German far-right has become lighter on the symbolism, part of an organic rebrand. The Fourth Reich stylings were pushing away too many potential recruits, so they’ve civilianised and gone low-key. 'Nipsters' is one coinage ('Nazi hipsters') who make online vegan cooking videos and wear Converse instead of steel cap boots.

“You can see a skinhead, a normal looking guy with a bike and a Jack Wolfskin windcheater, and someone with dreads,” says Henning, one of our translators, later. “And the skinhead will be gay, the guy with dreads will be a white-supremacist, and the guy in the windcheater will be a vicious-fighting anti-fa. You just can't tell.”

But that's not always true and the ‘streetwear’ brand Thor Steinar is unambiguous, the closest symbology can get to a swastika and still be legal in Germany. Its Nordic shields and heavy-metal fonts become points to avoid in the crowd, which by now is filling the whole of the square. As does the smell of alcohol, the beery packs of men spoiling for something.

In the middle of all this was music: Die Partei, a satirical political party chaired by a drag queen. Party hats and glitter, someone dressed as Hitler and signs saying something like “All the best things are free, you c—ts”. And a placard with a picture of a turd covered in lollies.

“That represents Dresden,” someone says. And the music… was that really Stevie Wonder? Here? 'Happy birth-da-ay… happy birthday to you!’

PEGIDA, the biggest anti-Muslim organisation in Europe is turning one.

In 2010, Angela Merkel gave a speech in which she said “multiculturalism in Germany has failed utterly”. That’s what the international papers said at least, but “multikulti”, the German word she used, carries a connotation more like “hippy dippy”.

In the same speech, she said Islam was now a part of Germany. But that wasn’t the headline. The multikulti comments were widely seen as chum for the right-flank of Merkel’s coalition; an acknowledgement of a hardening anti-immigration sentiment across the country.

In 2015, however, Angela Merkel opened Germany’s borders to an unknown number of refugees. Perhaps a million, with more to follow through family reunification. It was one of the biggest political decisions taken in Europe since the Second World War. For ‘Mama Merkel’, it was a moral imperative that those displaced by the Syrian civil war would not be turned away.

Not often spoken is the natural continuation, “… turned away, the way European Jews were turned away by everyone else”. The action is also a piece of moral accounting for history, a way of paying Germany’s unpayable debt. This is a humanitarian act on the same scale as past crimes. A rare opportunity to settle the bill.

The refugees have caused consternation in Merkel’s own coalition. They have caused outrage in Eastern Europe and tremors in the European Union’s Schengen zone migration policy that might undermine an already shaky-looking EU. But for reasons that aren’t immediately clear, the most severe frictions and resentments have burst out of the former East Germany.

Explaining why is a “conundrum”, one of the experts in this phenomenon tells me later. And Dresden is at the heart of the conundrum.

PEGIDA and its affiliates have lively followings in Leipzig and elsewhere, but it is here, every Monday, that tens of thousands of people turn out to show their disgust with the policy. PEGIDA is short for “Patriotische Europäer gegen die Islamisierung des Abendlandes, which means “Patriotic Europeans against the Islamisation of the Occident”. It was founded by a man called Lutz Bachmann, with an unusual catalyst.

Bachmann saw members of the Kurdish worker’s party, the PKK, fundraising to fight ISIS. He decided that that would not stand in Dresden. He called for an “evening stroll”. After a few weeks, thousands were showing up.

But PEGIDA almost didn’t make it through its first year. In January 2015, an image of Lutz Bachmann impersonating Hitler surfaced on Facebook, complete with comb-over and improvised toothbrush moustache. He resigned. Numbers at the rallies shrank. But he was soon back and, in the wake of the Charlie Hebdo attacks, PEGIDA rallies swelled to more than 35,000, with tens of thousands of counter-protesters.

The attendees believe that multiculturalism has failed. It’s a mystery to them why anyone, let alone Angela Merkel – who used to speak to their dowdy centre-right German values of thrift, conservatism and hard work – would suddenly turn around and embrace this failure.

The arrival of a million refugees is also seen as more change. The former East Germany has been in unending change since the Berlin Wall came down in 1989, leaving many of its citizens clinging to a slipping sense of constancy and identity. There’s a sense that this time it’s too big – and goes too far – to stand.

Look at all the euphemisms around migrants (‘integration’ and ‘parallel societies’ and ‘different cultures’) from the right kind of angle and they start to look like projection, a conversation which is really about Germans. Because how can Germany integrate all these people when it hasn’t even integrated itself yet?

We are told that there is a lot of crystal meth used in East Germany and that it’s part of what makes skinheads and hooligans here so dangerous. Separately, we are told that PEGIDA also has very good contacts in the gay community, and with nightclub promoters.

At the back of the square is a restaurant, where a few onlookers finish their beers and watch the thousands in front of them. They listen to speeches amplified over the counter-demonstrators and Die Partei. There is an African man watching and drinking, talking to a friend who seems to be commiserating with him. But halfway through the rally, I see this man behind the stage, talking and hugging with senior PEGIDA figures, who seem to know him well. They get to the brink of asking him on stage. No one will tell me who he is.

Above quietly-seething protestors in the square is a huge screen, much bigger than the one on stage. It is attached to the Semper Opera building itself and acts as the voice of officialdom, rotating neatly-worded messages of opposition to the crowd: "We are not a stage for racism", etc. It adds to the feeling, along with the police and counter-protesters, that the crowd is surrounded and in the face of official disapproval. This sense of being disrespectable is a key part of PEGIDA’s attraction.

There’s a sense that this time the change is too big to stand.

The media presence is modest: a few cameras at the back of the crowd and on the outskirts. There have been physical attacks on reporters at PEGIDA rallies and, by now, most stay away. By the end of this one, a cameraman will be pushed and beaten to the ground.

But our treatment is scrupulous. Seecum Cheung, who took the photos and videos accompanying this story, is from a Chinese and Vietnamese background, conspicuously a foreigner in a city and a place where there are almost no foreigners. We had wondered whether that would add to the danger. There are many suspicious looks. Still, she is assiduously, rather stiffly, helped by a few people in a way that seems to semaphore the words “see, we are not racists”.

But part way through the first speaker, my translator puts her gloved hands over her face. She is a Ukrainian Jew by lineage. For a moment, she can’t stand it.

"Oh my god, I'm so sorry," she says. "This is just so embarrassing. I can't believe it's happening here. Again."

Is it really again? And which again is it? It’s easy as an outsider – and perhaps even easy as a German – to forget that “again” in the East means for a third time.

I once saw a lump of a mysterious substance in a museum, a brick-sized piece of something filthy that looked a bit like papier mâché. When the Berlin Wall was falling, the East German intelligence services shoved so many files into the drains that they clogged, forming this stuff. Thousands of tons had to be extracted; a crude, physical metaphor for the sewer of history. But a clean transition from one dictatorship to another: Nazi to Stasi.

How these dictatorships feed into the politics of the PEGIDA rally becomes one of the most confusing things to observe. It’s like those anti-globalisation rallies of the left in the 90s, where every kind of demand made. In a way, this is an anti-globalisation rally itself. Like its predecessors, its demands have already failed. Because there is no unified identity to present any more, no standard to rally behind. Since the war, German identity has always been tentative. Here, the effort to express it forcefully winds up hopelessly confused.

There is signage from individual towns and villages nearby. Roads signs like 'Colditz' and 'Heidenau'; people repping their locales. There are silhouettes of jihadis with RPGs, or of minarets. And straight-up reprintings of the Australian government's 'NO WAY' campaign, which tells potential refugees they will never be resettled.

There will be a Confederate flag, and a few paces away, someone holding an-anti US sign saying 'Ami Out!' (Americans out). Russia, on the other hand, is welcome; there is evidence Putin is funding right-wing groups in Europe as part of his trolling diplomacy effort.

The current slogan 'Wir sind das Volk' (we are the people) is straight from the demonstrations of 1989.

There are signs and speeches comparing pro-refugee politicians and detractors of PEGIDA to Nazis and Angela Merkel to Hitler. How that sits with Lutz Bachmann’s Third Reich cosplay isn’t really reconciled. He now claims the images were photoshopped.

Whether the Nazis are something to avoid or to emulate is difficult to ascertain from the rally. The most prevalent symbol looks like a Norwegian ensign picked out in German red, gold and black.

No-one I ask can quite explain what it is: "Weimar flag, did you say?"

But they're saying Wirmer. It’s named after Josef Wirmer, a resistance fighter against the Nazis who came to symbolise that opposition in the 1930s. History is a lumpy, uncertain current in the crowd. Some of the speakers hark all the way back to the 7th century.

Others use expressions with a historical connotation, even contamination. They chanted by little clusters of demonstrators, taking on a pantomime quality, then receding back into the drone of the public address system. "Wir sind das Volk" - we are the people - belongs to the moment of 1989. From their age, some of these people must have been present at those demonstrations.

Others are uglier. "Lügenpresse" is a chant that starts whenever journalists are mentioned on stage. It means "lying press" and was resuscitated on the terraces at Dynamo Dresden football games. Before that, it was a refrain in Nazi propaganda.

Once the exasperated rage wavers, it’s remarkable how dull the rally is. It goes for almost three-and-a-half hours. Like Ayn Rand, or Stalin's speeches, it has the particular boringness of implacable ideology. It is a manifestation of all the crudest forms of verbal power: talking over someone, having the last word, having the loudest word.

It goes on and on and on, until the crowd is cold and chatting.

The speakers are carefully international. There is someone from the Czech Republic, someone from Italy and someone from Poland, who share their upbeat but unmistakably anti-Muslim message. The woman from Poland has a hard time. People start to laugh, not just at her clunky German, but just because she is Polish.

Sure enough, we get one of these pieces, read out by the writer Akif Pirinçci. Once modestly succesful as a thriller writer, he now operates a notorious blog called "Politically Incorrect", which specialises in calculatedly offensive memes, one-note satirical pieces, and boluses of Pirincci’s political writing. His Turkish background at least gives him some novelty. The blog, by reputation, doesn't have any of the ribald, carnival sense of a Charlie Hebdo or similar. It feels tired and mean.

He is one of those middle-aged men who finds political correctness a special invitation to provoke. There's something almost sexual about it; these dirty old men with their bad cartoons and their one-note satirical pieces (theme of satirical piece: the parameters of political correctness are applied wholesale to an emblem of traditional masculinity).

We will be getting a one-note satirical piece tonight. Reading it out takes 27 minutes. It is a writer's dream, I suppose, especially a bad writer's dream, to have this number of people listen to your work. Pirincci isn't going to pass up the opportunity. His work is crude, provocative, and poorly received.

A man runs towards the stage, screaming 'No propaganda!'

The righteous bürgers don't like his swearing. Rimma is incensed by the title of his upcoming book (naturally there is a plug). It means something like "the Faggotness of Germany". After hearing of this speech, his publisher, a subsidiary of Random House, will cancel his contract. Its theme is that PEGIDA and its ilk are like Jews, and that Merkel and others like Nazis, persecuting them. This theme bobs up from time to time in other speeches, but Pirincci pursues it with a virulence that others do not.

He makes a reference to concentration camps, to silence in response. The reference is something like "of course, they would like to put them in concentration camps and solve the problem, but unfortunately they're now closed". The "them" probably means anti-migration activists, but is interpreted – and reported – to mean refugees. The German government will open up an investigation into the writer, using a law designed to protect insults of the war dead.

Part way through, in a quiet bit (there are a lot of those when Pirincci speaks, and not because of rapture), a man runs right out towards the stage, screaming the same phrase over and over again. ‘No propaganda! No propaganda!’. He doesn’t look like an anti-fa. PEGIDA security tackles him and drags him back to the police line by the face, with just about the maximum amount of violence that can be delivered while still looking professional in public.

Then it’s back to the speaker. The crowd are too bored and cold now for the football match atmosphere to be maintained. It doesn't feel like any protest I've been to before: the crowd is too old, too static, too big. There’s an evangelical air, a revival concert mixed with the atmosphere of a business conference and something else. A motivational video plays out, set to music by a composer who supports PEGIDA, but wishes to remain anonymous.

The former head of the fascist English Defence League, Tommy Robinson, speaks. He is very short, so short it looks like he might need to stand on a box, and a translator towers over him.

He gives a speech about Judeo-Christian culture. I watch a group of neo-Nazis listen to this, but there is no sign of their expression changing. They might have stopped taking in words hours ago. Tommy Robinson talks about a unified European front against Islam. He blathers about the wars against Muslims, stringing them into a narrative - the battle of Lepanto. The Siege of Vienna. The Reconquista. The echo of 700 year old events, in a city other Tommies annihilated with bombing 70 years ago.

That’s one theory about why PEGIDA started here – the sense of being victims. Less well-known: when Dresden was firebombed, the casualties were partly so high because the city was full of refugees from the rest of Germany. Some of the survivors turned on each other when the scale of the losses was clear. Neighbours who had lost every member of their family against neighbours who had lost none.

At the end of the rally (finally, the end), most attendees leave as quickly as possible – retirees off on a weak run. The anti-fas are still waiting for them. But the departing attendees are happy, elated. It is the first time I have ever seen a man literally dance with joy.

“This!” he says, “This is our therapy session.”

And that’s what PEGIDA really is. Weekly group counselling, with catharsis

“There’s a Nazi pub near me. At least, that’s what everyone says,” the translator advises. So we go in. It’s in a parking lot, next to a Thai massage parlour and a few other little businesses. They are all closed.

I am expecting more PEGIDA-grade hooligans, perhaps in somewhere dim with filthy couches. But this place isn’t like that at all. It’s clean, hokey, with wood everywhere. Über-traditional. Inside is a long table with five or six men sitting at it (I am careful not to look too long and hard on the first pass).

It’s smoky and they have clearly been drinking a while. But it doesn’t feel like a drink at the pub between friends. Voices drop. This is a meeting.

Two men (their look: executive skinhead) leave almost immediately. Two remain: a ratty, coy looking man in his early thirties and the big man at the end of the table, who wears green overalls and sits clenching his fists.

The woman behind the bar turns out to be his wife. She is labouring under a collection of hanging steins. She is nervous, very nervous, and doing a bad job of hiding it. Her hands tremble. She fumbles the coasters for our beers. We are interrupting something.

But we chat with her. The place hasn’t been open long.

“So it’s old, but new,” I say. “What is the restaurant? What kind of food does it serve?”

“Traditional German food.”

We speak about schweinebraten [pork fillet served swimming in sauce]. I like it. It has gone out of fashion. We ask about the steins, then pretend to forget a lighter so we can talk to the men at the table. The translator helps; she has one of the most comically innocent faces I have ever seen. She also keeps her cool better than anyone else in the room.

Eventually some crude opening gambits get us invited to the main table. The boss’s name is Paul. Gruff and bearish. He is also too used to talking to stay quiet for long.

The younger man is called Karl. His eyes are clouded enough with drink to look sullen. I don’t like Karl.

“People are unsatisfied because they have an infinity of possibility and did not before.”

“I heard,” I said. “I heard that people are nostalgic, some of them, about the old communist days, how is that possible?”

Paul starts talking about a vanished world. There used to be all kinds of factories here. Paul once worked at several.

“I worked at the schnapps factory,” he says. “If I’d kept going there, it would have killed me.”

“So it’s not like working at a chocolate shop, where they say you get sick of it?”

“Oh no, I never got sick of it at all. I loved it. But my liver didn’t. Then I worked in the factory making bits of wood for furniture. You see everything had a place…”

A phrase the translator once used comes to my mind. Her explanation: “People are unsatisfied now in Germany because they have an infinity of possibility and did not before.”

“The government trained me as a house-painter, so I became a house-painter,” says Paul. “You were allocated a job, you did it, you were taken care of. It was a very social system.”

He runs a hand up a straight, linear groove in the table. Paul himself made the table with that hand, out of oak.

“Your life, it was laid out for you. On a system. On a plan. And really, it was the same system before the war, during the war. Do you understand? The administrations were the same. The schools were the same. Even the people were the same.”

Paul’s wife has the job of replacing the beers. A fresh one arrives and Paul gestures to it.

“Now everyone is coming to Germany,” he says. “The system is breaking down. It’s just like if you kept pouring beer into this glass. It’s already full.”

Then a pause.

“You know,” says Karl. “We were going to have plaques for this table. On the chairs. To show who sits where.

“Obviously, the boss sits at the top of the table. At the end. And then the next most important sits next to him, and so on down the table. To where you are. And then if you are late, you have to sit at the bar. Where you started. Ha ha ha.”

“I will bring you something,” says the wife of Paul. She disappears and we fill the gap with awkward smiles and then she comes back with a plate loaded with jerky.

“Here try this… It’s good, yes?” We nod.

“Can you believe this is from an ostrich? That it’s ostrich meat?” She chuckles. “Ostrich meat. In Dresden!”

“Well that explains why mine had a piece of sand in it.” I say. “It must be from the desert.”

They laugh. I turn and Karl is studying my face carefully with those red eyes.

“You must come,” says Paul. “Come tomorrow night, here for dinner. We’ll cook traditional German food. Up in town you can get everything – Turkish, Italian, Chinese – but you can’t get German food any more.”

We talk through the possible menus – perhaps a pork knuckle? Oh, that’s too Bavarian, but I like it too.

“We’ll cook whatever is good and have dinner together.”

“We’d be honoured to be your guests, and talk more.”

“Of course.”

Then Karl turns to us.

“And you and I should become friends on Facebook. What did you say your name was again?”

“Oh, I don’t use Facebook much.”

“What is your name?”

“It’s just…”

“Show me your account.”

Karl is suddenly very insistent. We never do make it to dinner.

I guess I have seen a few places suffering privation by now. Places of extreme and grasping poverty. Rotten buildings on prime real estate in East Timor, where the torture under the Indonesians was so bad that no-one will enter that cursed concrete again. Slums and favelas, former industrial towns where the main occupation has changed to “binge drinker”.

I have never been to a place that feels like Heidenau.

It is hard to imagine it is in Germany, although that is the only place where it could be. Heidenau is not so far from Dresden, only a 20 minute drive further west. If you search for the town online, the first image associated with it is a gang of masked men walking down the middle of the street, one carrying a bat. In August, Heidenau saw the worst ever episode of anti-refugee violence in Germany.

We drove into this small and sparse place, looking for some traces of this, some clue. It seemed stuck, not industrial, not agricultural, not regional. Not even particularly remote. Just runtish and a little pointless. We knew that a refugee centre burned, or partly burned.

So we kerb-crawled, looking for buildings that might have been attacked. But there seemed to be dozens that had been attacked. Old apartment blocks with bricked-up doorways and systematically smashed windows. Charred warehouses, abandoned houses graffitied so thoroughly it looked like an attempt to scratch them out. The vandalism was ubiquitous enough that it seemed pathogenic instead of human-borne, a blight spreading over the town through some unseen contagion.

Desperation usually breeds some kind of industry, energy, or spirit, as a by-product. Even if it curdles into something menacing. There was no sign of any such force in Heidenau. It was like a ghost town with people still trapped inside it.

As the rain eased, I asked some miserable looking passers-by about a bar, somewhere I could speak to someone, gauge the mood. There was no bar, not even a place to congregate and drown sorrows. The only thing open seemed to be a box full of gaming machines. Drinkers bought alone and at low prices from a discount liquor chain.

A cafe near the station was shut. A very clean, spacious Thai restaurant was completely empty. There was nothing, no locus bringing people together. The only human-occupied places in operation were a supermarket and beyond that, the roads. The riots had been a rare social event for Heidenau. Gatherings on the street remain under a temporary ban.

Placing refugees in a town with an 18% neo-Nazi vote feels like an experiment in generating resentment.

We found the refugee centre eventually. It was alongside a major road: a big, white, sports centre ringed with Red Cross fencing. At first, that looked protective, but all centres in Germany have this.

It did have its protective measures: there were hi-vis-wearing security guards at the gate (along with a sign banning drugs, alcohol and knives) and patrolling walkways along the exterior. This place needed not just guards, but sentries.

I suppose it must have felt logical, resettling refugees here. There is plenty of space. The working population is petering out via movement, age and chronic unemployment. From the distance of Berlin, it makes sense and uses one problem to solve another. There is another unspoken piece of logic: East German towns, especially places as benighted as Heidenau, are reliant on government spending to survive.

It’s another piece of the moral accounting: Germany pays its bill for the Holocaust, as the East pays its bill for reunification funding. Except that from the ground it feels different. It feels like finding a futureless, decrepit town with end-stage unemployment and an 18% neo-Nazi vote, then filling a big white building at the centre of it with refugees. It is a natural experiment in generating resentment.

This place has been decried in Germany. Exemplified. Singled out. It has something like a pariah status. Politicians and newspapers lined up to talk it down as "a national disgrace", "Germany's shame", etc. In a country supremely sensitive about any sign of a return to the dark past, it's Heidenau that has dug deepest and darkest. It tried to throw a Kristallnacht party.

What would have happened if those rioters had made it past the police to the cowering Syrians inside?

There seems to be a semi-permanent traffic jam on the road outside the centre, creating an enforced viewing, a mutually unwilling surveillance. This also gives us minutes staring at the car in front: a shitty, silver hatchback, with a custom decal on the back window.

"Mama Merkel, wir sind das Pack." Mama Merkel, we are the mob.

On the highway, heading west, we drive past two huge police trucks. These are water cannons, being deployed to a protest. There are so many protests now, it is impossible to keep track of them. These trucks are coming from some place in the east, perhaps Leipzig, where there have been LEGIDA protests and counter-protests by communists and anarchists who have gotten a hosing. The trucks are now off somewhere else.

There is a far-right protest on the other side of the country, featuring members of the neo-Nazi party, the National Democratic Party of Germany (NPD). One of the organisers, Lennart Schwarzenbach, has finally agreed to talk. Lennart wants to meet in a Schweinske.

Schweinske is a pig-themed chain restaurant which specialises in German cuisine, mainly schnitzels. This Schweinske is in Harburg, a gritty industrial mini-city on the fringes of Hamburg, and the place where the September 11 hijackers plotted their attacks. The schnitzels on non-German themes like BBQ and Cajun are no good.

Inside the restaurant are cartoon pigs, in two and three dimensions, in a variety of comical situations. One has burst through the ceiling, his trotters hanging down. There is an Einstein pig and a Mozart pig. On the exterior is a giant, shiny pink snout.

I wonder if Lennart has chosen this place as a kind of talisman to keep away Muslims and Jews. He is young and amiable enough, with a smile that looks rehearsed. It takes me a couple of minutes to see the slight cauliflowering of one of his ears, the featherweight curve of his shoulders.

"Are you a boxer?" I ask.

"I do martial arts, but that's not where this is from,” he says. “That's from a fight at school. My friend hit me with a chair. I still don't know if he did it on purpose."

Lennart smiles his smile. He is wary at first and drinks very slowly.

I guess, correctly, that he is an engineer. There's something international about guessing that about a man in his twenties who dresses conservatively, but badly, at the same time. Lennart had his political awakening very young – he joined the NPD at 17. He was seeing changes in his own neighbourhood, he says.

Controversial views: NPD protest organiser Lennart Schwarzenbach.

We mention football. Like many other places, the city's teams are partly divided by politics. Sankt Pauli is famous world over as the "punk team", the leftists from the Reeperbahn area. Naturally, Lennart supports the team with right-wing fans, which is much bigger and more successful. Somehow he gets its name wrong, calling it HVS rather than HSV Hamburg.

It's not a mistake caused by nerves, but a sign of a strange, hermetic distance between himself and the world. Part of that is artificial and quite deliberate, because the ructions and debates inside the NPD aren't like those inside other political parties. Lennart is reluctant to explain too deeply ("of course, internal debates within the party will stay internal within the party"), but he will say that there lifestyle disagreements: what to eat, what to wear, what to say.

"Do you eat at Turkish restaurants?" I ask, and he does. But some of his comrades refuse to.

There is an attempt by party members to weed out words that have entered German from other languages, especially English. It has the same aims as "political correctness", but the end result is more cultish, something like the lexicon produced by Scientology.

"For example," says Lennart, "we don't say 'email'. Because that's an English word. We say ‘electro-post’ instead, which was an earlier German word for what you call email.”

When they use these pieces of custom terminology, those outside the party have no idea what they are talking about.

Some of Lennart's views are illegal to express in Germany. The German government has tried to ban the NPD more than once, on the grounds that it incites violence and is a threat to the constitution. Last time, the case was thrown out because the party was found to be so riddled with informants and undercover agents that it was impossible to determine who was actually in charge. It was possible that its whole policy was a kind of projection of what the state thought neo-Nazis believed.

"I have a question for you as well," our translator, Henning, says to Lennart.

Henning is an unusual man. "I'm not really a political guy, but I do like music." [Only half of this is true.] "What kind of music do you listen to?"

"Oh, a bit of everything," says Lennart. But he won't listen to rap. And it says "volksmusik" (folk music) on his Facebook page.

Lennart says he has never been to a concert. This could be covering up attendance at nationalist "rechtsrock" (right-wing rock) events – not a very reputable activity for this white-collar operative. But it feels true, part of the strange bubble that leads a lifetime resident to get the name of his local football team wrong. As we speak, he gets calls from someone interested in joining the party.

"Do you, like PEGIDA, think Islam is incompatible with democracy?” I ask. “That it causes a special kind of problems?"

"Not especially, no. I have some Muslim friends," Lennart says.

Some of my best friends are...

"Where from?"

But it’s true. I've encountered this before, where white supremacists can end up perversely narrowed in bigotry bandwidth compared with less dedicated racists. A common-or-garden variety hater won't make much distinction between a Persian or an Arab, or an Indian from Chennai versus an Indian from Kashmir. But a neo-Nazi can. Instead, he is looking for allies against other kinds of migrants. The ones from Africa seem to get a regular mention.

He claims Germany is a military outpost of America and it is illegal to be proud of the past.

The number one film in Germany this week is a controversial one called Er Ist Wieder Da (He Is Back). Hitler wakes up in the future, where he accidentally becomes a Borat-style insult comedy. On first waking, he wonders why there are so many Turks in Germany and how Berlin has been restored from bombing. He puts the two together: the Turks must have responded to Admiral Dönitz’s attempt to forge an alliance and arrived to save Germany from the Allies. That’s the joke.

Lennart doesn’t seem to mind Turks, as long as they are integrated with German values.

“Wouldn’t true integration involve intermarriage?” I ask.

“No, that’s completely unnecessary.” The difference say, between being a good neighbour and a family member.

“Who is a good example of a migrant who has integrated?”

“Akif Pirinçci.”

Lennart won’t talk about Jews. Germany is being controlled by America. It is a kind of military outpost of America, with its strings being pulled, its sovereignty deliberately destroyed, he says. It is impossible, illegal, for a German to be proud of Germany, of its past. Its war dead cannot even be consecrated.

He is very careful. He is very repetitive. Henning is unimpressed.

“That guy was just so banal,” the translator says afterwards, mimicking the squinting smile. "In Germany, we have a useful term for people like that."

"What do you call them?"

"Nazis."

At the entrance to the museum is a suit of armour, propped up to read an old copy of The Adventures of Don Quixote. It’s a kind of in-joke by the curators: this is a Renaissance-era castle, so looking for knights in armour is barking up the wrong tree.

Artworks of Grail Knights on the walls also reference this abortive quest, but many of Wewelsburg’s visitors are not looking for knights. This is one of the biggest neo-Nazi pilgrimage sites in Germany.

From the outside, it’s not a sinister place. Let’s be frank, it is disappointingly benign and housing a youth hostel. The courtyard is well-lit and picks up the echo of children’s voices.

It turns out this disappointment is quite deliberate. Because there is no denying that Nazism has a zombie-like quality. Places, monuments, pick up an energy that must be exorcised by officialdom. The phenomenon worsens even as it dwindles in living memory.

Wewelsburg castle is effectively a shrine for goths, Satanists and the far-right.

So many neo-Nazis were holding vigils at Rudolf Hess’s grave that in 2011, his remains were exhumed, cremated and scattered into the sea. His memorial monument, which bore the legend “ICH HAB’S GEWAGT” (I DARED), was destroyed. The next year, a modest headstone marking the burial plot of Alois and Klara Hitler (parents of Adolf) had to be removed. He Is Back.

In Wewelsburg, this is achieved with beanbags. They are ugly, in the orange and grey of a dotcom start-up palette. They cover up a famous symbol: the “Schwarze Sonne”, or Black Sun. It is a special, multi-armed occultist swastika at the centre of a room where the highest-ranked SS officers were supposed to live. The symbol only became famous in the 1990s.

The curators here have an unusual job. The head is a Holocaust historian who has spent her time interviewing survivors. Now she runs what is effectively a shrine for the goths, Satanists and far-right types attracted to the castle’s occult history.

“We used to try and take it as an opportunity to educate them,” says the curator, Kirsten John-Stucke.

“But of course, they didn’t want to know. They just ignored it, so eventually we gave up. Now, instead, we just concentrate on the history. The absolute facts.”

This was the place where Himmler tried to transition the SS from a military unit into a religious cult. Borrowing from ancient paradigms of Greece and Rome, alongside occult symbology, high-ranking officers were to be initiated, wedded and given their funeral rites.

Blood ceremonies were intimated at. In the crypt, there is something that might be a gas flue for an ‘eternal flame’ that was never lit. There are plinths that were never occupied. The huge stone chasm has eerie acoustics: turn, face the wall and whisper, and someone 20 metres away doing the same can hear you.

Locked gates. People try and perform rites here.

Built by slave labour from concentration camps, it was all supposed to be destroyed. Himmler ordered it all blown up. But late in the war, the local SS commander didn’t have enough dynamite. He blew up a Renaissance tower instead of the building site.

The symbol didn't have significance until it was copied by pagan circles, white nationalists and heavy metal circles.

“Do you ever wish that the castle had been destroyed?” I ask the curators. They are not sure.

There is something about this place that defied repurposing as a memorial. A concentration camp survivor painted a series in the crypt: disasters of war, set at intervals. A series of canvases in that garish, post-war phosphogenic paint, employed like a chemical weapon. Distorted figures clutching their faces, framed by shattered cityscapes.

No-one was interested in seeing them. They mouldered here in the damp.

Wewelsburg curators Kirsten John-Stucke and Markus Moore explain what happened as the far-right discovered the castle.

The Schwarze Sonne didn’t seem to have any special significance to the Nazis. They only used it a handful of times. It found its relevance 40 years after Himmler was dead, copied by some underground artist and suffused through pagan circles, white nationalists, heavy metal, whatever. So a kind of cult had been created after all, improvising versions of never-performed ceremonies that would have been improvised anyway.

No wonder the curators seem wry. There is dissonance between what they are custodians of, and the buffoons interested in it. Thugs making their way through museum chambers in faux reverence. Satanists and Nazi-Satanists, whispering among the beanbags.

Nazi-suffused documentary makers come, randy for scandal. One asked if they could flood the chamber with smoke. Another had unearthed a cauldron in a lake far away. Could it be linked to the castle through… witchcraft? You had to laugh, really.

A medieval dialectic was playing out, in a world that should be past that. Rumours and village gossip about strange acts in the castle. Symbols with unspeakable power. ("The swastika has a kind of witchcraft. Why else would it be banned?")

One of the ugly paintings in the crypt is called ‘The Refugees’. It features a hollow-faced woman with a head-wrap, tugging children away from the skeleton of a bombed city. It is curiously unaffecting.

No-one comes here to look at the paintings. They are swamped by the dark energy of this horror-movie Nazism. Whatever memory, whatever warning or protective function they were supposed to possess, is gone.

Further viewing: what happened to two Syrians who sought refuge in Germany? Watch Dateline's "Refugee Roulette".