BRUSSELS - Cyprus clinched a last-ditch deal with international lenders on Monday for a 10 billion euro ($13 billion) bailout that will shut down its second largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians.

The agreement emerged after fraught negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund - hours before a deadline to avert a collapse of the banking system.

The plan, swiftly endorsed by euro zone finance ministers, will spare the east Mediterranean island a financial meltdown by winding down Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a "good bank".

Deposits above 100,000 euros, which under EU law are not guaranteed, will be frozen and used to resolve debts, and Laiki will effectively be shuttered, with thousands of job losses.

An EU spokesman said no levy would be imposed on any deposits in Cypriot banks. A first attempt at a deal last week collapsed when the Cypriot parliament rejected a proposed levy on all deposits.

Related: Crisis in tiny Cyprus creates big mess for Europe

A senior source involved in the talks said Anastasiades had threatened to resign at one stage if he was pushed too far.

EU diplomats said the president, flown to Brussels in a private jet chartered by the European Commission, had fought to preserve the country's business model as an offshore financial centre drawing huge sums from wealthy Russians and Britons.

The key issues in dispute were how Cyprus would raise 5.8 billion euros from its banking sector towards its own financial rescue, and how to restructure and resolve the outsized banks.

The EU's economic affairs chief Olli Rehn said there were no good options but "only hard choices left" for the latest casualty of the euro zone crisis.

With banks closed for the last week, the Central Bank of Cyprus imposed a 100-euros per day limit on withdrawals from cash machines at the two biggest banks to avert a run.

French Finance Minister Pierre Moscovici rejected charges that the EU had brought Cypriots to their knees, saying it was the island's offshore business model that had failed.

"To all those who say that we are strangling an entire people ... Cyprus is a casino economy that was on the brink of bankruptcy," he told Canal Plus television.

The euro gained against the dollar on the news in early Asian trading.

Analysts had said failure to clinch a deal could cause a financial market selloff, but some said the island's small size - it accounts for just 0.2 percent of the euro zone's economic output - meant contagion would be limited.

The abandoned levy on bank deposits had unsettled investors since it represented an unprecedented step in Europe's handling of a debt crisis that has spread from Greece, to Ireland, Portugal, Spain and Italy.

Anxious mood
In the Cypriot capital, Nicosia, on Sunday the mood was anxious.

"I haven't felt so uncertain about the future since I was 13 and Cyprus was invaded," said Dora Giorgali, 53, a nursery teacher who lost her job two years ago when the school she worked at closed down.

"I have two children studying abroad and I tell them not to return to Cyprus. Imagine a mother saying that," she said in a central Nicosia square. "I think a solution will be found tonight but it won't be in the best interests of our country."

Virginia Mayo / AP

Cypriot Finance Minister Michalis Sarris, left, yawns as he listens during a media conference after an emergency eurogroup meeting in Brussels on Monday.

Cyprus's banking sector, with assets eight times the size of its economy, has been crippled by exposure to Greece, where private bondholders suffered a 75 percent "haircut" last year.

Without a deal by the end of Monday, the ECB said it would cut off emergency funds to the banks, spelling certain collapse and potentially pushing the country out of the euro.

Conservative leader Anastasiades, barely a month in office and wrestling with Cyprus' worst crisis since a 1974 invasion by Turkish forces split the island in two, was forced to back down on his efforts to shield big account holders.

Anticipating a run when banks reopen on Tuesday, parliament has given the government powers to impose capital controls.

Parliament
About 200 bank employees protested outside the presidential palace on Sunday chanting "troika out of Cyprus" and "Cyprus will not become a protectorate".

In a stunning vote on Tuesday, the 56-seat parliament rejected a levy on depositors, big and small. Finance Minister Michael Sarris then spent three fruitless days in Moscow trying to win help from Russia, whose citizens and companies have billions of euros at stake in Cypriot banks.

On Friday, lawmakers voted to nationalize pension funds and split failing lenders into good and bad banks - the measure likely to be applied to Laiki. The plan to tap pension funds was shelved due to German opposition, a Cypriot official said.

The revised bailout plan many not require further parliamentary approval since the idea of a levy was dropped.

The tottering banks hold 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros - enormous sums for an island of 1.1 million people which could never sustain such a big financial system on its own.

This story was originally published on Sun Mar 24, 2013 8:59 PM EDT

A solution to Cyprus' bailout crisis within the framework set down by the European Union may be possible within "the next few hours," the deputy leader of the island's ruling Democratic Rally party said on Friday.

"There is cautious optimism that in the next few hours we may be able to reach an agreed platform so parliament can approve these specific measures which will be consistent with the approach, the framework and the targets agreed at the last Eurogroup," Averof Neophytou told reporters. 

The news came hours after the Cypriot finance minister left Moscow empty-handed when Russia turned down appeals for aid, leaving the island to strike a bailout deal with the EU before Tuesday or face the collapse of its financial system.

The rebuff left Cyprus looking increasingly isolated, with the deadline looming to find billions of euros demanded by the EU in return for a 10 billion euro ($12.93 billion) bailout.

Without it, the European Central Bank said on Wednesday it would cut off emergency funds to the country's teetering banks, potentially pushing Cyprus out of Europe's single currency.

"The talks have ended as far as the Russian side is concerned," Russian Finance Minister Anton Siluanov told reporters after two days of crisis talks with his Cypriot counterpart, Michael Sarris.

Having angrily rejected a proposed levy on tax deposits in exchange for the EU bailout, Nicosia had turned to the Kremlin to renegotiate a loan deal, win more financing and lure Russian investors to cut-price Cypriot banks and gas reserves.

Wealthy Russians have billions of euros at stake in Cyprus's outsized and now crippled banking sector.

But Siluanov said Russian investors were not interested in Cypriot gas and that the talks had ended without result.

Sarris was due to fly home, where lawmakers were preparing to debate measures proposed by the government to raise at least some of the 5.8 billion euros ($7.48 billion) required to clinch the EU bailout.

They included a "solidarity fund" bundling state assets, including future gas revenues and nationalized pension funds, as the basis for an emergency bond issue and likened by JP Morgan to "a national fire sale".

They were also considering a bank restructuring bill that officials said would see the country's second largest lender, Cyprus Popular Bank, split into good and bad assets, and a government call for the power to impose capital controls to stem a flood of funds leaving the island when banks reopen on Tuesday after a week-long shutdown.

'Playing with fire'
There was no silver bullet, however, and Cyprus's partners in the 17-nation currency bloc were growing increasingly unimpressed.

"I still believe we will get a settlement, but Cyprus is playing with fire," Volker Kauder, a leading conservative ally of German Chancellor Angela Merkel, told public television ARD.

There were long lines at ATMs on Thursday and angry scenes outside parliament, where hundreds of demonstrators gathered after rumors spread that Popular Bank would be closed down and its staff laid off.

"We have children studying abroad, and next month we need to send them money," protester Stalou Christodoulido said through tears. "We'll lose what money we had and saved for so many years if the bank goes down."

Cypriots have been stunned by the pace of the unfolding drama, having elected conservative President Nicos Anastasiades barely a month ago on a mandate to secure a bailout. News that the deal would involve a levy on bank deposits, even for smaller savers, outraged Cypriots, who raided cash machines last weekend.

Related:

EU to Cypriots: Let us raid your savings or no bailout

Cyprus bailout backlash poses little wider risk - for now

Full business coverage from NBC News

This story was originally published on Fri Mar 22, 2013 6:02 AM EDT

Petros Karadjias / AP

People line up to use an ATM machine outside of Laiki Bank branch in Larnaca, Cyprus, on Saturday. Many rushed to cooperative banks which are open Saturdays in Cyprus after learning that the terms of a bailout deal that the cash-strapped country hammered out with international lenders includes a one-time levy on bank deposits.

NICOSIA, Cyprus - Cyprus's parliament will decide on Monday whether savers must pay a levy on bank deposits under terms for an international bailout to avert bankruptcy - with approval far from certain.

The euro zone demand on Saturday that savers pay up to 10 percent of deposits as a condition for the 10 billion euro ($13 billion) bailout drew fury in the eastern Mediterranean island and caused some jitters elsewhere in the region.

Cypriots emptied ATMs after news emerged of bailout terms which broke a previous euro zone taboo on protecting depositors in its efforts to address the regional debt crisis.

Newly elected Cypriot President Nicos Anastasiades said refusing the bailout would have led to the collapse of the island's two largest banks, badly singed by their exposure to bailed out neighbour Greece.

The tax on deposits in Cyprus, which accounts for only 0.2 percent of the euro zone's economy, is expected to raise up to 6 billion euros as a condition for the bailout, mainly needed to recapitalize banks.

Those affected will include rich Russians with deposits in Cyprus and Europeans who have retired to the island as well as Cypriots themselves.

The size of foreign deposits in Cyprus - estimated at 37 percent of the total - was one reason the euro zone agreed to the tax on savings, to take effect when banks reopen on Tuesday. Cyprus stopped electronic transfers over the weekend.

Cyprus's parliament was due to convene on Sunday in an emergency session to discuss the proposed penalties on deposits: 9.9 percent for those exceeding 100,000 euros and 6.7 percent on anything below that. However, the Cyprus News Agency reported that the meetings had been postponed until Monday.

The choice facing Cyprus was between "the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis," President Anastasiades said in a written statement.

'A gun to our head'
His right-wing Democratic Rally party, with 20 seats in the 56-member parliament, needs support from other factions for a vote to pass.

"The dilemmas are very tough," said Marios Karoyian, head of the Democratic Party, junior partner in the coalition government. "Things are unbelievably hard."

He did not say which way his party would vote. It is already split over backing Anastasiades three weeks ago.

Cyprus's Communist party AKEL, accused of stalling on a bailout during its tenure in power until the end of February, was likely to vote against the measure. The socialist Edek party called EU demands "absurd".

"This is unacceptably unfair and we are against it," said Adonis Yiangou of the Greens Party, the smallest in parliament but with the potential ability to swing any vote.

"They have got a gun to our head," he said.

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Wael Hamzeh / EPA

Supporters of the Salafist Sheikh Ahmad al-Assir take part in a rally showing solidarity with the Syrian people in Beirut, Lebanon, on Feb. 8.

Syria warned it may strike at rebels hiding in neighboring Lebanon if the Lebanese army does not act, the state news agency SANA said on Friday, the second anniversary of the civil war.

Syria's Foreign Ministry told its Lebanese counterpart late on Thursday that a "large number" of militants had crossed Lebanon's northern border into the Syrian town of Tel Kalakh over the past two days, SANA said.

"Syria expects the Lebanese side to prevent these armed terrorist groups from using the borders as a crossing point, because they target Syrian people and are violating Syrian sovereignty," the diplomatic cable said.

It said Syria's "patience is not unlimited," even though "Syrian forces have so far exercised restraint from striking at armed gangs inside Lebanese territory."

Fighting near the border resulted in a large number of casualties, SANA said, before the gunmen retreated into Lebanon.

Lebanon has a policy of "dissociation" from the two-year civil war in Syria but officials say they feel their country is increasingly at risk of being dragged into a conflict that the United Nations says has killed 70,000 Syrians.

Threat to Lebanon's existence
U.N. refugee agency chief Antonio Guterres said on Friday that the Syrian conflict threatens Lebanon's existence.

"The international community should recognize that the Syrian crisis represents an existential threat to Lebanon and should show Lebanon ... much stronger support than has happened until now," he told reporters in Beirut.

Lebanon, a nation of 4 million, fought its own devastating civil war from 1975 to 1990 and has sectarian tensions among Christians and Sunni and Shiite Muslims that have been heightened by the fighting in Syria.

Tensions between Lebanese groups that support the Syrian opposition and those that support Syrian President Bashar Assad have been intensifying and have sometimes turned violent.

The International Committee of the Red Cross appealed to foreign powers Friday to press combatants in Syria to halt attacks on civilians and aid workers, saying all sides were violating the Geneva Conventions. 

"Many atrocities against civilians have been reported or witnessed over the past two years, and we have also seen indiscriminate attacks against civilians and the targeting of health-care personnel and aid workers," said Robert Mardini, head of ICRC operations for the Near and Middle East. 

Meanwhile, European Union governments rejected a Franco-British push on Friday to lift an EU arms embargo to allow weapons supplies to Syrian rebels, voicing fears this could spark an arms race and worsen regional instability.

France and Britain found little support for their proposal to ease the embargo at an EU summit in Brussels, EU diplomats said, although they asked the bloc's foreign ministers to look again at the issue next week.

"Nobody really is interested (in lifting the embargo)," an EU diplomat said. "There is no prospect of change any time soon."

EU governments want to support the rebels, but many expressed fears on Friday that allowing weapons to flow to them could lead to arms falling into the wrong hands -- especially Islamist militants in the rebel ranks -- and lead Assad's backers to step up arms deliveries to his government.

European Council President Herman van Rompuy said leaders had asked their foreign ministers to look at the issue "as a matter of priority" at a March 22-23 meeting in Dublin. 

Reuters

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Workers cover 2,000-year-old graffiti in Pompeii with Plexiglas on Tuesday.

Published at 8:23 a.m. ET: POMPEII, Italy -- On Tuesday evening, the sound of a pneumatic drill broke the silence that has been part of Pompeii's character since the eruption of Mount Vesuvius buried the city in 79 A.D.

Three workers cut holes in one of the city's historic walls, attached mounts with concrete and fixed a Plexiglas cover to protect 2,000-year-old graffiti.

"Sorry we don't have hard hats on," the men said, as if not following safety standards was the only thing wrong with their supposed preservation work. In fact, according to experts, the workmen were defacing priceless antiquities.

"Oh my god, look at them. Do you see an archaeologist around?" said Dario Sautto, a member of Italy's Cultural Heritage Observatory who witnessed the work. 

As is so often the case with the preservation of Pompeii, the cure appears to be worse than the disease, he said. 

"Those men are bricklayers, without a qualified supervisor in sight," he added. "They are just patching things up ahead of the visit of the [European Union] commissioner."

Indeed, on Wednesday, Johannes Hahn, regional affairs commissioner for the European Union (EU), was surveying Pompeii and discussing  the start of the Great Pompeii Project, a multimillion-dollar plan to revamp and secure the decaying archaeological site -- and stop patch-up jobs like the one Sautto had just witnessed. 

Pompeii, an ancient city blanketed by 20 feet of volcanic ash and pumice after Vesuvius erupted almost 2,000 years ago, is just one of thousands of Italian sites that have attracted tourists and archaeologists alike for hundreds of years.  And for decades it has symbolized the failings of the Italian state in preserving its rich historical, cultural and archaeological heritage.

In 2010, one stone too many crumbled -- the famous House of Gladiators, used for training before fights in the nearby amphitheater, collapsed into a pile of rubble. The world's archaeological community cringed, and so did the EU.

So the EU pledged to spend 105 million euros (about $142 million) to make sure that interventions like the one witnessed Tuesday become a thing of the past. 

The project consists of "using some of the most sophisticated and up-to-date technology to preserve the ruins of the site, which has been badly damaged in recent years," the EU said Tuesday.

Franco Origlia / Getty Images, file

The House of the Gladiators was cordoned off after its collapse in 2010, drawing attention to the fragile state of Pompeii.

Despite 2.3 million tourists visiting the ruins of Pompeii every year, the site has slowly been falling into decay due to mismanagement, corruption and the influence of the "Camorra," the local mafia.

Millions of dollars have been spent in the past to try to prevent the UNESCO World Heritage Site falling into disarray, but every attempt to turn the ancient site into a truly modern tourist attraction has gone up in smoke. 

On Tuesday, Annamaria Caccavo, a businesswoman who won a multimillion-dollar restoration tender to work on Pompeii, was placed under house arrest on charges of aiding abuse of office, corrupting a public official and fraud.

"The problem with Pompeii is that they always treat its preservation like an emergency," Sautto said. "But the emergency started in 79 A.D., not today. And still they can't figure out how to save it."

Caccavo's arrest, which came a day before the EU officially stepped in to straighten up the ruins' management, sent a signal that legality and transparency will play a major role in the new regime.

Pompeii has never been famous for its preservation, and pieces fall off its ruins regularly.  Only 30 percent of the site is open to the public, with restoration works frozen in time, just like the casts of its citizens who died when Vesuvius erupted. Guards around the site are outnumbered by stray dogs, and public toilets are a lucky find in the maze of ruins.

The EU's Hahn said he took more than a professional interest in helping ensure the protection of Pompeii's treasures. 

"I have taken a great personal interest in getting this project off the ground ever since I heard about the collapse of the House of the Gladiators in November 2010, when I happened to be in Rome," he said. "Here is a chance not just to help save something which is part of Europe's cultural identity but to revitalize (the regional) economy by attracting more visitors and creating new jobs."

In Pompeii, it's a race against time to preserve what's left of this ancient site, before it becomes history.

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Yves Herman / Reuters, file

Britain's Prime Minister David Cameron (right) faces some tough negotiations with the likes of Germany's Chancellor Angela Merkel (left).

Updated at 8:55 p.m. ET: British Prime Minister David Cameron has cancelled a major speech, originally scheduled for Friday, because of the uncertain outcome of the hostage-taking crisis at an Algerian gas plant that started Wednesday, the Telegraph reported.

An unknown number of the hostages — which included dozens of foreign nationals and Algerians — were killed as Algerian forces attempted a rescue mission that reportedly went awry late Thursday. One Briton was reported dead in the hostage crisis, and Cameron warned that the country should be prepared for "further bad news."

Original report:

LONDON — It says a lot about Britain's ambivalent attitude toward its membership of the European Union that the UK Independence Party (UKIP), which wants the country to leave the bloc, has 12 seats in the European Parliament.

Although UKIP has yet to have any politicians elected to Britain's Westminster parliament, recent polls suggest it is surging in popularity.

In several recent by-elections, the party even placed ahead of the Liberal Democrats, junior partners with the Conservatives in Britain's coalition government.

Amid UKIP's rise and pressure from elements within his own Conservative party to loosen ties with Europe, British Prime Minister David Cameron is scheduled to give a key speech Friday mapping out how he sees his country's future role in the 27-nation bloc. 

Britain is so close to continental Europe — the English Channel is just 26 miles across at its narrowest point — that people sometimes swim to France. But, politically, the country has arguably not been further away for decades.

The right-leaning Telegraph newspaper reported Thursday that "Cameron is expected to pledge to renegotiate Britain’s [EU] membership, if he is re-elected in 2015, after which the revised relationship will be the subject of a referendum."

Reuters described Cameron's looming speech as "one of the most closely watched Europe addresses by a British leader since World War Two."

Political and business leaders have voiced concerns over the risk of calling a referendum that could see Britain leaving the EU, which offers a market of 500 million people on its doorstep.

There are those who want to extend British influence in the EU and build upon what one group called "Britain's epic post-war achievements" within the bloc, such as free trade and security. Last year, the EU was awarded the Nobel Peace Prize for turning the "continent of war" into a "continent of peace."

And Reuters noted that "international partners from the United States to Germany and Ireland have made it clear they oppose a British EU exit and believe that such a move would isolate and damage Britain itself."

But critics of the U.K.'s current relationship with Europe have multiple targets. EU legislation takes precedence over national laws in many key sectors and EU regulations dominate some industries.

Europe's common currency, the euro, is mired in turmoil, leaving most Britons glad the U.K. kept the pound.

John Curtice, electoral analyst and professor of politics at Strathclyde University, said UKIP’s poll surge was a major factor in pushing Britain’s relationship with the rest of Europe to the center of the political agenda.

"There is no doubt that recent electoral success for UKIP has made Europe an issue for Conservatives," he said.

"There is enormous pressure on David Cameron from within his party," he added. "Many Conservative members of parliament are looking ahead to the next election and thinking, 'I'll be damned if I lose because my party cannot come up with a coherent policy on Europe that voters can support.'"

Yves Herman / Reuters, file

The rising star of British politics? UK Independence Party leader Nigel Farage stands near a coffin symbolizing "the death of the Euro" during a demonstration in 2011 urging the European Union to stop extending help to Greece.

Curtice said UKIP’s poll ratings appeared to be driven by mid-term protest votes that traditionally went to Liberal Democrats, but which were up for grabs now that the party has joined the Conservatives in the ruling coalition.

"However, regardless of why UKIP is getting attention, its presence is making Europe a problem for the Conservative party and its supporters, many of whom are instinctively wary of Europe," Curtice added.

One key challenge for Cameron is that getting the EU to change has proved notoriously difficult for successive British prime ministers. Cameron has also often been left isolated at EU summits due to his opposition to various proposals.

Professor Iain Begg, of the European Institute at the London School of Economics, said a hard-line stance by Cameron could potentially result in "amendments to some of the [EU] directives that Britain finds unpalatable." 

However, he said that a total renegotiation of the treaties that bind the EU together was unlikely.

Cameron will need to reconcile demands from so-called Euroskeptics within his own party for the repatriation of powers from Brussels with calls from other parts of his coalition government for closer European integration.

And he'll need to do so while not offending his political peers and allies in Europe and beyond.

Speaking to Reuters, one unnamed EU diplomat wondered how Cameron could walk that tightrope:

"Britain's Europe policy has been confusing for a long time. He's going to have to sort out a lot of misunderstandings before he can convince people of what he's doing," said the official, underlining that uncertainty would not go away overnight. 

"The risk remains of an exit by mistake. It shouldn't happen, but other things that shouldn't have happened did."

Finland's prime minister signaled he was worried about what Cameron might announce during Friday's speech.

"The EU without Britain is pretty much the same as fish without chips," Jyrki Katainen told reporters in Brussels on Wednesday. "It's not a meal any more." 

NBC News' Alastair Jamieson and Reuters contributed to this report.

"When police arrived they called an ambulance, but then told me that they could not help me any further and left," Rahimi recalled, explaining how he only realized how serious his injuries were after spotting blood running out from under his T-shirt during the brutal attack on Sept. 17, 2011.

Rahimi's case does not appear to be unique. As the euro zone debt crisis leaves Greece grappling with a 25 percent overall unemployment rate, activists say they have noted an increase in the number of hate crimes reported.

'It is virtually impossible to find a job': Brain drain is new Greek tragedy

Far-right populism has also found fertile ground in the near-bankrupt country, where the economy is forecast to contract by 7 percent this year and every second youth is out of work.

Nazi-style salutes
The Golden Dawn party – no more than an extremist fringe group when it was established in the late 1980s and which has been branded "neo-Nazi" by its opponents – has been gaining support amid the country's deteriorating economic situation.

Citing a poll by VPRC which appeared in the "Ellada Avrio" newspaper on Friday, Reuters reported:

Backing for the ultra-nationalist Golden Dawn, which has been linked to a rise in attacks against migrants in recent months, stood at 14 percent, double their take in June elections that gave the party a foothold in parliament. That would make the group the country's third largest party.

The party's rabidly anti-immigrant message has stuck a chord with many voters as EU/IMF imposed austerity propels unemployment levels to a record 25 percent.

Golden Dawn denies it is neo-Nazi but bears a Swastika-like emblem and its supporters have been seen giving Nazi-style salutes. The party's leader, Nikolaos Mihaloliakos, has denied the Holocaust occurred while one lawmaker, Eleni Zaroulia, called immigrants "sub-humans" in parliament on Thursday.

Reuters added that the opinion poll showed that "Greeks' frustration with their political leaders has grown as the coalition prepares to push through the new round of austerity measures to appease [foreign] lenders and secure more bailout aid and keep the country afloat."

Alkis Konstantinidis / EPA, file

Migrants are held during a police ID-check operation in Athens, Greece, on August 6.

Over the past decade, Greece has become the major gateway into the European Union for illegal immigrants and asylum-seekers from Asia and Africa.

'Growing despair'
Experts estimate that between 800,000 and 1 million undocumented migrants now live in Greece, a country with a population of nearly 11 million.

"The rapid increase of illegal immigration in the past years, growing despair over the ailing economy and a loss of trust in our political leadership have fueled public anger and given way to dangerous populism in the country," says Loukas Tsoukalis, head of Greek think-tank Eliamep.

Campaigning on a message of ultra-nationalism and fierce anti-immigrant policies, Golden Dawn won 18 seats in parliament during June's national election.

"We have to protect 10 million Greeks that are suffering from the very bad economy and from the killings, rapes, shootings and everything else that all illegal immigrants are doing to this country," Ilias Panagotiaros, a Golden Dawn politician and a member of Greek parliament, told NBC News.

Andy Eckardt / NBC News

Ilias Panagiotaros of Greece's far-right Golden Dawn Party.

A poll last month found that the popularity of Nikos Mihalolioakos, head of the Golden Dawn party, has climbed to 22 percent, up 8 points from May.

However, it is not just a harsh political message that has been drawing support for Golden Dawn.

In an attempt to build an image of social responsibility, followers of the movement have taken up the roles of what some Greeks call "a crumbling public support system."

'For Greeks only'
Last month, members of Golden Dawn set up booths in a central Athens square to distribute groceries and collect blood donations. "For Greeks only" was the message, after visitors were asked to provide identification of Greek citizenship.

"Golden Dawn has been taking advantage of the growing despair, presents itself as a protector of the weak and vulnerable," analyst Tsoukalis says. "In dangerous neighborhoods they have offered to escort old ladies to the grocery store around the corner."

Rising political and socio-economic discontent, nurtured by a surge of crime rates in major Greek cities, have also led to widespread public acceptance that followers of Golden Dawn sometimes substitute for police and other government officials.

A video shot in early September shows members of Golden Dawn checking work permits at a local market in Rafina, where migrant vendors sell their goods. Minutes later, several people with black Golden Dawn T-shirts and Greek flags moved in and destroyed the stands.

"We are going to defend our country, our history, our religion, our culture," Golden Dawn's Panagiotaros adds. He is also one of the founders of a ultra-nationalistic football fan club called Galazia Stratia, or Blue Army, that has vowed to "defend Greek national pride inside the stadiums".

Spain's economic crisis turns middle-class families into illegal squatters

In September, José Manuel Barroso, the president of the European Commission, included a stark warning in his annual 'state of the union' address, saying that the euro crisis was contributing to the rise in extremism.

And in recent months, officials in Athens have vowed to set up a special police force to combat violence against migrants and plan to impose tougher penalties for these type of crimes.

"Something must happen quick," says Judith Sunderland from Human Rights Watch, who is author of a report called "Hate on the Streets: Xenophobic violence in Greece."  

“Xenophobic hate crimes have reached an alarming proportion in Greece," she added. "Victims are often actively discouraged from filing complaints, told by police officers that it is not worth their while or that they should fight back themselves. And many migrants fear that they could be locked up themselves because of their legal status."

'The country is on its knees': Ireland grapples with economic collapse

Meanwhile, Rahimi is still waiting for justice in the wake of his attack. The trial has been postponed seven times already in the past year.

"And it remains unclear, whether the prosecutor will argue that the attack had been motivated by racist or xenophobic sentiment," Sunderland told NBC News.

In debt or jobless, many Italians choose suicide

One of the three accused is Themis Skordeli, a female member of Golden Dawn, who failed to get elected to parliament last May.

According to local media reports, Skordeli has been identified as a member of a so called 'anti-migrant patrol group', which was formed to 'work the streets' of poorer Athens' neighborhoods.

Rahimi, who came to Greece in 2005, says that he now rarely leaves his apartment and has become extremely cautious when going out to visit friends.

"I am afraid to live here," he says. "I will wait until the trial is over and then definitely head to another country."

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