Pavlos Fyssas, a 34-year-old hip hop artist and anti-fascist, was stabbed to death early this morning in the western Athens district of Keratsini, reportedly after a football argument.
Police said they had arrested a 45-year-old member of the Golden Dawn neo-Nazi group in connection with the killing.
Golden Dawn immediately denied any connection, but the incident is likely to inflame the precarious social situation in Greece where anger is simmering over four years of austerity cuts.
Two separate demonstrations are planned in Athens today, with civil servants joined by hospital doctors, municipal workers and teachers.
Greece's union of civil servants has called a two-day strike over the latest job overhaul.
Overall, Greece has pledged to axe 4,000 state jobs and redeploy 25,000 public sector workers by the end of the year, in return for its much-needed rescue loans.
Civil servants have to accept new posts or spend eight months on reduced salaries as alternative posts are found, with the risk of losing their jobs altogether.
Conservative Prime Minister Antonis Samaras, who heads a tenuous coalition with the socialists, this week said the Greek economy is likely to need another six years to return to pre-crisis levels.
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