Maria Balogh and her 13-year-old daughter Ketrin were asleep at home last week when attackers burst in and shot the mother dead with pellet guns. It was the latest in a string of murders of Roma in Hungary.

The pain of economic downturn is exacerbating tensions and resentment towards minorities and immigrants across Europe and even in North Africa.

In Italy, a rise in illegal immigration is behind a law permitting citizens' patrols on the streets. About 100 Romanians quit Northern Ireland after attacks on their homes in June. And in Algiers, Chinese immigrant labourers and native Algerians fought with knives and bludgeons on August 3.

But in Hungary, both the crisis and the violence are particularly drastic. The country was the first nation in the EU to turn to the IMF for help last year, and faces deep recession and mounting unemployment.

The economic slowdown has especially hurt the Roma, who account for six to seven per cent of the population and find it hard getting jobs even in prosperous times.

The crisis has reinforced social tensions, and the recent brutal attacks on the Roma have brought the country to the brink of open conflict, according to its president.

"We know that the situation is tense to the point of explosion," Laszlo Solyom told a news conference this week, urging Hungarians to feel compassion for Roma, or gypsies: More than half a dozen, including children, have died in recent violent attacks.

Ms Balogh's daughter Ketrin is still in hospital with serious injuries after the August 3 attack in the village of Kisleta in eastern Hungary.

All over eastern Europe, the Roma population is significant and increasing in number. Public resentment is fierce.

"(The Roma) have long elicited this attitude, mainly through their own behaviour, robberies, murders and all," said Anna Molnar, 21, a fresh university graduate.

"I know counter-examples too, some (Roma) work and make no trouble. But it's a vicious circle. Even they have a hard time getting jobs because of the way the rest of them behave."

Hungary's government forecasts the economy will contract by 6.7 per cent this year and remain in recession next year. Tens of thousands of jobs have been lost in the economic crisis, and Roma in any case are unwelcome in many lines of work.

Less than a quarter of Roma work legally in Hungary, according to the last nationwide survey. In Slovakia, the government puts the figure below 10 per cent.

"Employers seal the gates," said Istvan Szirmai, an official at Hungary's Labour Ministry. "They have the right to choose ... and they do not accept Gypsies."

A lack of jobs or access to proper education in the past few decades means a growing proportion of the Roma now form what researchers call a new underclass, where joblessness and poverty are extreme and hereditary.

"Six to eight per cent of society needs constant support," said Janos Ladanyi, a Roma expert at the Budapest University of Economics. "Even their third-world subsistence costs so much that it undermines the conditions of sustained economic growth."

Radical parties exploiting the Gypsy issue have made electoral gains from Hungary to Bulgaria. In Hungary, the Jobbik party wants to cut welfare to the chronically unemployed, many of whom are Roma, and clamp down on the petty misdemeanours they call "Roma crime". Polls now suggest Jobbik would win as many as 50 out of 386 seats in Parliament in elections due in April or May 2010.

Extremism is aggravating tensions: each Roma murder ignites talk of racist motives. Nothing has been proven, but the only link between the killings is the victims' Roma background.

In February attackers in the central Hungarian village of Tatarszentgyorgy set a house on fire and shot dead a five-year-old boy as he fled the home, as well as his father who came running after him. Police have so far been unable to catch any attackers, prompting civil groups to warn the Roma could fight back in a radical movement of their own.

"A new generation (of Roma) is growing up," said Aladar Horvath, president of the Roma Civil Rights Foundation in Budapest. "It's a matter of time before they start a radical Roma movement. We're not there yet, but it would be natural."

Amnesty International said in an August 4 report the attacks in Hungary have created a climate of fear and intimidation.

In another village, Bodvalenke in the mountains of eastern Hungary, the government is helping support a house-decorating scheme to attract tourists, create jobs and relieve subsistence conditions for the Roma who make up most of the population.

Roma artist Janos Horvath recently started to paint folk tales on the walls of houses. Local children help fill in his outlines with rain-resistant colours of bright blue and orange, while men prepare the next house for decoration.

The images will eventually cover dozens of houses, and the work brings in pay equal to the minimum wage.

"The majority (of Hungary's population) have enjoyed the benefits of the last 20 years," said Eszter Pasztor, an activist who started the project. "The Roma have not ... We need to integrate them. Their taxes will pay for my pension, too."