This article in the London Telegraph explains reasons why Italian women are not becoming mothers.
When we were stationed in Naples the baby shortage was explained as the result of couples marrying later since it triggers a flood of expenses. The wedding has to be "just so" and there is the new custom for the parents to buy/build the newlyweds a house.
My observations were different. The past few decades have seen a shift from spoiling children and then expecting them to become mature, productive members of society to expecting that they never have to grow up. Selfishness is expected from 6 year olds, but 26 year olds? No one seems willing to give up the goodies of life to have bratty children of their own.
In all likelihood, Italy, will continue to shrink to the point of extinction. What will the Vatican do in 50 years, surrounded by empty buildings or worse? I do not know, but the future does not look rosy for the churches, art, cuisine, and culture of bella Italia.
The Japanese have exhibited a very similar cultural shift, a population cannot pass down a culture to the next generation if they are only being concerned about themselves.
"Dogs in prams dressed in frilly T-shirts, dogs with their own cafes and boutiques, dogs taken on holiday to health spas -- meet the child substitutes of a trend-setting group of Japanese women. Dogs now outnumber children aged 10 and under in ageing, infertile Japan". (NY Times)