View toward Riddarholmskyrkan (“Church of Knight’s Island”) and Gamla Stan (“Old Town”) from Stadshuset (Stockholm City Hall). Many people consider Stockholm (population 760,000) one of the most beautiful capitals in Europe. Between all the water, green space, architecture and history, it's difficult to argue. Much of this 750-year-old city is built on islands surrounded by the confluence of Lake Mälaren and the Baltic Sea.