Historically, nations depended very heavily on mercenaries in this time period. The majority of both the Spanish and the Dutch armies in the Eighty Years War where foreigners. The Thirty Year War saw heavy use of mercenaries.
Especially early on, the standing army was a rarity. Take a look at this:
http://celyn.drizzlehosting.com/jherek/16thMilSci.pdf
It gives the examples of standing armies: France 1566 had 16.000 standing soldiers, while in wartime its army would swell to at least 50.000.
At the end of the period, certainly, mercenaries fell out of use and the levee en masse replaced them completely. But certainly in the first half of the game, if history is to be followed, the majority of your European army should be mercenaries.