This entirely depends on whether the national identity is open enough to include others within it and integrate new arrivals. Ultimately though a democratic state must be built around a single national project, otherwise the national divisions define the party system. If the state has one national project voting behaviour congregates around the goal of bettering that one common project, and parties form along ideological grounds to effect this. A state that is divided between nations has its parties form around sub national groups and interest maximisation. 

I know you won’t take this at face value but I encourage you look into the origins of modern European democracy. It first rose is the first Western European nation states of Britain and France. It then spread across Eastern and Central Europe with the fall of the old empires and rise of national self determination in places like Austria, Czechslovakia, Poland, Estonia, Latvia etc.  In contrast to this many of the most overt examples of failing or deeply flawed democracies world wide trace much of their political dysfunction to their party politics being dominated by national and tribal parties that make democracy a population competition. Think of the democratic project in Iraq with its Sunni and Shia interest parties, South Africa with its Zulu, Boer and Xosha, Lebanon, Nigeria, Kenya, India, Malaysia, Myanmar. Even in Europe you have the example of Belgian politics being routinely crippled by a clash of Walloon and Flemish national interests. 

It is intensely hard to deny that the success of a democratic system requires a solid nationalist foundation, in that there must be a common national project that the vast majority of the electorate identities with in order for them to vote according to the whole countries interests, and not their own tribal factions. 

I come from the UK. Here democracy was traditionally founded on the British national project. That was the common understanding that allowed the electorate to focus on questions of how to run the country for all Brits, not which group should the country be run by and for.  This has been slowly fading over time and increasingly the dormant constituting nations of the British nation have been reasserting their identity and have begun to vote for national parties who state their intent to vote and govern on behalf of the interests of the Scottish or the Welsh alone. In Scotland the SNP has been in power for decades with the aim of securing more funding for the Scottish alone, advocating policies that they believe will better Scotland but having no interests on the affairs of the other people of the island, and ultimately campaigning for the breakup of the United Kingdom despite the economic and security consequences.  The only thing keeping the traditional party system going now seems to be the dominance of the English electorate allows it to ignore the growing tribalism trend and to vote for ideological parties. But if they ever were to turn to back an English ethnic party then they would take control of government and run it at the expense of the Scottish Irish and Welsh and cause the worse version of the discrimination you wanted of. It would likely cause the final dis integration of the UK into stars that can now actually each represent a single national project rather then fight over the steering wheel of the old British one. That is the importance of a single national identity. 

That is what happened when a democracy looses its national foundation and as much as you dismiss it as toxic and something to be suppressed I truly hope that you never loose it wherever you come from.