ATHENS - The murder of Manolis Kantaris, 44, last week has initiated a vicious circle of violence in the Greek capital that deepens the existing wounds of the country and makes many wonder what the future holds for Athenians.

Riot policemen pick up a burning sign of the Greek cross during a rally in Athens May 12, 2011. (REUTERS/Yiorgos Karahalis) Kantaris was stabbed to death late at night while preparing to drive his wife to the hospital to give birth to their second child. The incident took place in the heart of Athens, a place that residents increasingly describe as a lawless area where organised criminal groups rampage.

It is alleged by police - given footage collected from nearby security cameras, and locals - that the three murderers were of northern Africa origin.

The following day members of nationalist-fascist groups - whose presence in Athens’s devalued neighbourhoods during the last year has increased - have staged numerous attacks to ‘avenge’ the Kantaris murder. They ruthlessly attacked migrants and abused people who protested against their violence.

"People in this society wherever they come from need to stay united, criminality does not depend on nationality or ethnic background, and none should hold migrants collectively responsible for this murder," Naim El Gadour, head of the Muslim Association of Greece told IPS. "Sober people have to take the initiative and seek solutions to the unfolding crisis in downtown Athens. We need this - Greeks and foreigners alike."

The police are being criticised for tolerating the violent nationalist actions to an extent that led Minister of Security Xristos Papoutsis to publicly admit lack of control over security forces operating in the field.

"It is better to dissolve a security structure, no matter how effective this is, if it operates under a special tolerance status that covers up abuses of power and incidence of extreme violence," Papoutsis said while warning about a "democratic deficit and arbitrariness inside the security structures of the state."

The atmosphere deteriorated further when it came to light that three young people had been injured, one seriously - from what the doctors have described as intolerable police brutality - during a general strike march the same day. This was the eighth strike organised since 2010 against the measures the government has undertaken to pull the country out of its economic crisis.

The following night two men killed a Bangladeshi - stabbing him four times before escaping on a bike. Despite lack of evidence, the crime has been extensively described as racially motivated - something the police have accepted as a serious possibility.

Violence again spiralled into a frenzy Thursday afternoon while two demonstrations - one against migrants and criminality, and one against police violence – were held around the centre of Athens. Attacks against migrants continued, leaving 19 foreigners and one Greek person hospitalised.

"It feels like Athens is going through its darkest night," El Gadour said. "We cannot let anyone think about what happens in terms of two sides killing each other, this will get us nowhere. We have to deal with people that hate us and want to hurt us."

Residents in Athens, already demoralised by economic the crisis are now living in fear for their security. Marianna Pantermali, an activist and resident in the city centre where the nationalists have staged their action, says the situation is dramatic. "People around those neighbourhoods have lost trust in parties and politicians and are rapidly adopting the views of extremists.

"If they do not actively participate, they passively approve the pogrom against migrants and refugees. They are asking for blood. We have never seen anything like that."

The fascist organisation Golden Dawn receives between 1 and 1.5 percent of the national vote. Anarchists seem also to be mobilizing. On Saturday afternoon a crowd of 30 alleged to be extreme leftists, launched an attack on a police department in Exarxia neighbourhood. Molotov cocktails seriously injured three citizens.

The situation reminds Xara Kouki, a young social researcher with ELIAMEP Institute here, of a powder keg that is about to explode, she wrote in an article published by The Guardian that became rapidly popular among young Greeks through social media.

"It has been less than 12 months since this crisis began, but little stories that illustrate the change keep bubbling up," Kouki says. "The city full of homeless people looking for food in dustbins; friends fired without compensation, or accepting wage cuts; police officers beating up citizens who protest, schools and hospitals shutting; teachers and doctors losing their jobs; journalists censored; trade unionists persecuted; racist attacks downtown."

The government has been unable to convince the public as well as its lenders that the structural adjustment plan implemented for more than a year now is succeeding in dragging the economy out of the crisis.

According to official figures, the number of unemployed is climbing every month - it is currently 15.4 percent.

"Its now clear to Europeans that Greece will not be able to borrow again from the markets," Savvas Robolis, professor of public policy at Panteion University, told IPS. "At the end of 2012 Greece will have to pay back an expiring debt of 66 billion dollars."

The loan from the troika of the European Union (EU), International Monetary Fund (IMF), and the European Central Bank (ECB), will bring 24 billion dollars and "we will be missing another 42 while the country is locked out of the markets. The equation simply does not work out."