I'm not going to be biased and say the Netherlands because that's where I am from, but the Netherlands is most definitely one of the most progressive and tolerant countries in the world. With Sweden, Denmark and Canada.
Yes, racism is a huge problem here (black face, muslims etc.) but that problem mostly stems from ignorant and lower class Dutch people. The government is taking actions accordingly, though, which I'm happy about. There's a long road to go about when we're talking about racism in Europe, but steps are being made and it's going to take time.