While the Greek government seeks to establish closer diplomatic ties with Israel (in the wake of a cooling of relations between Israel and Turkey), incidents of anti-Semitism are rising in Greece, inflamed by the deepening economic crisis.

Greece, already burdened by a severe austerity program brought in exchange of a huge bailout from the International Monetary Fund, is witnessing a spike in hate crimes against minorities.

Desperate for cash, the Socialist government of George Papandreou has sought out foreign investors, including China, Saudi Arabia and Israel.

Earlier this month, a group of Jewish American leaders came to Athens to help promote Israeli relations with Greece.

Last week, one of the most Greeks in the world, Mikis Theodorakis -- known for composing the music for the film Zorba the Greek -- appeared on television and blamed U.S. Jews for Greece’s economic malaise, declaring he is “anti-Israel and anti-Semitic.”

“Everything that happens today in the world has to do with the Zionists,” he said. “American Jews are behind the world economic crisis that has hit Greece also.”

The composer also warned we're in danger! Zionism and it leaders are here, meeting in our country! This is no laughing matter.”

For good measure, he added that Zionism controls “America and the banking system that Greece is now a victim of.

Theodorakis also criticized Prime Minister George Papandreou for seeking closer ties with Israel, claiming that Prime Minister Binyamin Netanyahu, is guilty of “war crimes in Lebanon and Gaza.”

Theodorakis’ inflammatory comments outraged The Simon Wiesenthal Center, which demanded that the International Music Council (IMC) strip the composer of the IMC-UNESCO International Music Prize he won six years ago.

In a letter to the IMC, The Wiesenthal Center stated that Theodorakis offends all Jews, now including the identity of many of his predecessor awardees, such as Leonard Bernstein, Daniel Barenboim, Benny Goodman, Gidon Kremer, Yehudi Menuhin.

In response to the gathering storm, Kyriakos Loukakis, the Greek ambassador to Israel, wrote in an e-mail to The Jerusalem Post: “I would like to inform you that, as a matter of principle, we do not comment on opinions of private citizens. Secondly, the Greek government has always opposed extreme views. Thirdly, relations between Greece and Israel are very friendly.”

However, anti-Semitism remains a problem in Greece (as well as racism against waves of immigrants from the Middle East and Asia who have arrived in recent years).

During World War II, at least 60,000 Greek Jews were rounded up by the Nazis and sent to death camps Auschwitz and Treblinka. Only about 6,000 Jews remain in the country now.

Greece did not even formally recognize Israel until 1991.

Since the Greek government dedicated a Holocaust Memorial in Athens last May, synagogues and Jewish cemeteries have been vandalized and the Jewish Museum of Greece was daubed with swastikas.

Last month, a far-right member of Athens City Council Nikolaos Michaloliakos, caused a scandal when he allegedly gave a Nazi salute during a heated argument in a municipal meeting.

Michaloliakos is leader of Chrysi Avgi party, which has reportedly been involved with violent attacks against immigrants in Athens.

Last December, an important Greek Orthodox priest, The Metropolite of Piraeus Seraphim, also blamed the Jews for being responsible for the country’s economic crisis (he was quickly condemned by the Athens government).

Another prominent Greek anti-Semite is Konstantinos Plevris, an attorney and Holocaust denier who was sentenced to prison in 2007 for inciting racial hatred with a book entitled Jews: The Whole Truth. His sentence was later overturned.

David Saltiel, president of the Central Jewish Board of Greece, told the Los Angeles Times: We've always been under siege by fanatics and far-right political movements here. The fear now is that anti-Semitism will get worse with the financial crisis.

Meanwhile, trade between Greece and Israel amounted to about $500-million last year and is poised to increase. The Israelis are exporting computer software, electronic and medical equipment, while the Greeks export raw materials and agricultural products.