Northern Ireland, where everything appeared to be tranquil and resolved, erupted last night for the second successive night. Protestants and Catholics exchanged Molotov cocktails, gunshots and even pipe bombs.

Both sides blamed each other but such an outbreak has been unknown for the last 10 years. It was back to the old days of masked men wearing balaclavas and scarves covering their faces. New technology was also employed as the rioters used laser pens to blind the police.

One of the Protestant targets was a Roman Catholic church. Protestants claimed that their neighborhood had been attacked from the church grounds on the previous night.

One theory behind the violent outbreak was that a power struggle was developing within the Ulster Volunteer force (UVF), a Protestant paramilitary organization, and sectarian violence was being used by one of the competing factions to gain power.

The Protestant and Catholic leaders have a great deal at stake in preserving quiet. Northern Ireland Protestant First Minister Peter Robinson and Catholic deputy First Minister Martin McGuinness condemned the riot as well as a bomb attack on the police in Catholic West Belfast..

This part of the year is traditionally tense because it coincides with Protestant marches commemorating the Protestant victory over the Catholics in the 17th Century. However, in previous years, this period was not marked by such violence.

While the connection between nationalist violence and the economy is frequently oversimplified, one cannot rule out a connection between the economic downturn and the rioting.

The Irish tiger economy has gone bust and Great Britain, according to economists, must face more years of economic pain before the economy is turned around. Unemployment levels are going up, particularly youth unemployment. Even without the sectarian element this could have produced unrest.

One of the forces driving the 1998 Good Friday agreement was the sense that sectarian violence was keeping Northern Ireland out of the general prosperity in both Ireland and Britain and that all parties-Protestants and Catholics alike – could benefit economically from peace in Northern Ireland. If the economic horizon is now closed this could help re-stoke sectarian violence.

We are witnessing something similar in Spain's  Basque region.