MUNICH, Germany (Reuters) - A 38-year-old German woman charged with complicity in a series of racist murders played a key role in creating an air of normality around her neo-Nazi cell, a prosecutor said on Tuesday.

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The case of Beate Zschaepe and the National Socialist Underground (NSU), the group blamed for the murders of eight Turks, a Greek and a German policewoman, has scandalized Germany and exposed an institutional blind spot for far-right extremism.

The second day of the eagerly awaited trial was mostly taken up with legal arguments and a reading of the charges against Zschaepe, whose two presumed male accomplices, Uwe Boehnhardt and Uwe Mundlos, both committed suicide in 2011.

“The NSU members considered themselves a murder squad, committing killings with racist and anti-state motives,” federal public prosecutor Herbert Diemer said.

“Zschaepe had the critical role of creating an air of normality and legality for the terrorist group. This included giving innocuous reasons to neighbors and friends to explain the long absences of Boehnhardt and Mundlos, who were seeking possible targets and planning the deeds.”

Zschaepe is charged with complicity in the shooting of the 10 victims in towns across Germany between 2000 and 2007, as well as two bombings in immigrant areas of Cologne and 15 bank robberies.

Wearing a light grey trouser suit, with her long hair tied back in a ponytail, Zschaepe listened motionless to the charges.

She has maintained a resolute silence since her arrest, leaving people struggling to make sense of her motives.

The chance discovery of the NSU, which went undetected for more than a decade, has forced Germany to acknowledge that it has a more militant and dangerous neo-Nazi fringe than previously thought, and reopened a debate about whether it must do more to tackle racism and the far right.

The German parliament is conducting an inquiry into how the security services failed for so long to link the murders or share information, despite having informers close to the group.

Hearings are scheduled into early 2014, with the trio’s relatives due to testify among hundreds of witnesses.