FWIW Germany still allows for parties like the NPD (Nationalist Party of Germany), DVU (German People's Union), REP (The Republicans) and AfD (Alternative for Germany) to exist, despite having pretty strict laws about actual nazis.
The NPD is closely tied to neo-nazis and always on the verge of being banned.
The DVU was almost identical but much smaller and eventually merged with them in 2011 after several alliances.
The Republicans are a more moderate right-wing anti-immigration party that is mostly insignificant.
The AfD are populist nationalists (similar to UKIP) who try to keep some distance to actual neo-nazis but share many of the same ideas and affiliations (although much less prominently than the NPD does). They currently hold 24.4% of votes in Saxony-Anhalt, 20.8% in Mecklenburg-Vorpommern and are represented in every state parliament except Hesse (as of 2013, though that might change with the upcoming election this year).
I think on an absolute spectrum the AfD is the closest thing Germany has to the US Republican party but most Germans consider the AfD literal nazis (albeit in sheep's clothing).
Not everything is an excluded middle, a bi-directional slippery slope that has to end up at one extreme or the other.