During the second quarter, the Italian economy shrank, taking the country closer to a recession than it has been in more than a decade as households and businesses cope with high energy prices.

The economy contracted 0.3% after expanding 0.5% from January to March, says the Rome-based statistic department. Flavia Krause-Jackson for Bloomberg also reports that from the same period one year earlier, there was no growth at all, and economists surveyed are expecting stagnation.

iShares MSCI Italy Index (EWI) and the NETS S&P/MIB Index Fund (ITL) may reflect a slumping consumer confidence and stalled manufacturing. The bottom line is that the price of crude is 65% more expensive than it was a year earlier, and it’s hurting.

To help trigger growth, Prime Minster Silvio Berlusconi has gone against the people and reduced the state bureaucracy while raising the average pension age to 58. Meanwhile, consumers have cut back by not spending on new cars and new clothes.

EWI is down 21.1% year-to-date, while ITL launched on May 7.