Phil Cain in Devecser, Hungary -

The Hungarian village of Devecser was in the news again in August when it was invaded by a horde of neo-Nazi thugs baying for the blood of the local Roma, less than two years after being hit by a million cubic metres of caustic red sludge from a local aluminium plant. In its suffering, Devecser is symptomatic of the problems of economic stagnation and rising racism that Hungary is facing.

On August 5, around a thousand right-wing extremists were bussed in to the village of 5,000 and whipped up into a murderous frenzy. "You are going to die here, Gypsies! You are going to die here!" they shouted, throwing water bottles and rocks at houses they thought were home to Roma families. Elderly Roma women whose homes they passed say they were "terrified."

The marchers had first rallied outside the village church, many wearing combat boots and black shirts and flying the Arpad flag, the symbol of a Greater Hungary. Non-Roma Hungarians had three options, they were told by Laszlo Toroczkai of the far-right Sixty-four Counties, "to emigrate, to become slaves of the Gypsies, or to fight."

"All the trash must be swept out of the country," said Attila Laszlo of the paramilitary group For A Better Future Civil Guard. Later, Zsolt Tyirityan of the Outlaw Army, another paramilitary group, said: "The Gypsy is genetically-coded for criminality" and that "genetically-encoded waste" must "disappear from public life."

Gabor Ferenczi, an MP for Jobbik, a far-right party which won 16% of the vote at the last general election in 2010, said he wanted to see peace, order and safety in Devecser. This, he said, would come when "normal" Hungarians defended themselves against Gypsies. In case of trouble, he urged them to call on paramilitaries to resolve it.

"This is the second disaster here and it is the worse of the two," sighs Alfred Kiraly, a Roma member of Better Chances After The Flood, a group set up to deal with the consequences of the caustic deluge of October 2010. You could do something about the flood of mud, he says, but not about the neo-Nazis.

Indeed, a culture of silence exists in Hungary about the country's racial tensions, aided and abetted by the government of Prime Minister Victor Orban.

Conspiracy of silence

Devecser Mayor Tamas Toldi, a member of the ruling rightist Fidesz party, says he was deeply shocked by the speeches, yet was powerless to stop an event missold to him as a peace march and complains that he had no help from the central government, which often appears to tolerate such views. Orban eventually bowed to public pressure and condemned the anti-Semitic chanting of "dirty Jews" and "Buchenwald" at a Hungary-Israel football match on August 15, while his government is also trying rehabilitate some historical figures with fascist pasts.

Kristof Szombati of the LMP, a small liberal Green party, says Fidesz's tactics are designed to avoid confronting their right-wing voters whom they worry will defect to Jobbik at the next general election in 2014; many of them are already unhappy at the government's incompetent handling of the economy, which is back in recession. "They do not comment on far-right actions in the national media, but ask the local Fidesz strongman to address the media," he says.

By doing so, Fidesz hopes to prevent local crises becoming a national issue, as happened last year when the far-right staged an anti-Roma invasion in Gyongyospata. "It also allows them to evade confronting right-wing voters sympathetic to Jobbik whom they hope to keep in their camp," Szombati says.

Szombati explains that Devecser was chosen for the march not because of particular tensions between the two communities, but because a new electoral law favours the largest first two parties in each district, meaning Jobbik seats outside its eastern heartland will be vulnerable at the next elections set for 2014.

Most of the village's thousand-or-so Roma have lived alongside their Magyar neighbours for generations. They may sometimes have a more bronzed complexion, but they speak the same Hungarian and wear the same clothes as anyone else. Some grumble about noise and littering, but no-one complains of aggression or even minor theft. The biggest frustration everyone faces after the sludge disaster is that moving away is nigh-on impossible because house prices collapsed. "The mud did not discriminate between different races," says Kiraly.

The pretext for the march was a convoluted conflict between long-time neighbours. In late July, a Roma man honked his car horn in anger at being blocked by the vehicle of a visitor to the Magyar neighbour of his daughter. Two days later, this slanging match escalated into two bloody brawls involving makeshift weapons. Both sides claim they were the innocent victims.

Soon after, anonymous letters were published on the neo-Nazi web site kuruc.info appealing for help. "Hundreds of Gypsies attacked a handful of Magyars," they claimed. At the same time, the non-Roma family involved keeps no fewer than nine Rottweilers, a group of which had previously escaped and killed their neighbour's German Shepherd. The family's lawyer talks darkly of a "civil war" if Roma do not conform to the norms of the majority.

Mayor Toldi wants to organise forums for each street for people to meet and agree informal rules to iron out problems they have in their neighbourhood. "What should we talk about in these forums?" asks Alfred Király, the issues amounting to nothing more than a little boy giving a cheeky answer or dropping a sweet wrapper on the street. They might easily be hijacked by Jobbik troublemakers.

Jobbik is bolder than ever in fanning the flames of petty local disputes so it can cling on to its vulnerable foothold in the centre and west of the country. The party already suffered a serious blow in late July when one its leading lights, MEP Csanad Szegedi, was forced to resign after it was revealed he is Jewish. The Fidesz government, meanwhile, hopes to save itself from the flames by leaving the issue to its local representative, avoiding the need to draw a clear line between its right flank and Jobbik and its cohorts.

But without clarity on where the far-right really starts and the availability of the force necessary to prevent its most dangerous expression, Jobbik has little to stop it moving in and polarising once peaceful villages.