That's probably the most likely outcome, but we don't know for sure. When children become rare they may find that society caters to them - universities are easier to get into, employers pay them more, parents get heavy subsidies for creating them, etc. (Admittedly in Europe there are fewer jobs to begin with so this employer effect may not exist there the way it might in Japan or Australia.) Then people seek to have more of them. It's possible that the whole demographic decline will be homeostatic. But we just don't know because this is all uncharted territory.
The thing that most interests me about it is the imbalance among young men, who are always the foot soldiers of violent social change. When I saw the video linked here of les jeunes arabes appearing to rampage through Antwerp after a demonstration against the cartoons what I thought was that there sure were a lot of them and the Belgians seemed pretty helpless in their midst.
Actually, I'm more of the mind that it's been women who are usually in the vanguard of social change (at least in the Western world). It's just unfortunate that the most recent historical social change put forward by women is feminism, which is probably the most responsible factor in the declining birth rate.
Perhaps if more women realized it is a failed ideology we could get back to the good ol' basics of the birds and bees.
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")
This assumes that the rationale behind low birth rates is primarily economic, but it's probably not.
Rather, I think the primary driver is the freedom of women to forego pregnancy in preference to other pursuits. A lot of women would rather not be mothers right away, but would rather do as us men do: have a rewarding career, and to do pretty much what we want to do. And then have a kid, as a matter of personal fulfillment.
This mindset is enabled by easy access to birth control and abortion, but those are merely enablers to the underlying mindset.
The solution is easy to describe, if beastly difficult to make happen (because it's a cultural change): having several children has to become an attractive goal for women.