With generous (eg like in France) benefits per child, or generous unemployment benefits for young mothers, I could agree with more flexibility. The problem is, benefits cost immediate money from the State while putting the burden on families and businesses only costs in the long run. Given our current debt, the choice is very limited...
I think the best thing countries in Europe could do is implement something like a negative income tax and kill all that regulation and special programs/taxes/bureaucracy but I haven't even heard anyone in Europe propose such a move.
I don't think that deregulation is always right, but it is when you have too much - and we do have too much regulation, too much discretionarily applied.
Eliminate paper currency and only have digital transactions, force the banks to disclose accounts and transaction information to remove gray economy and use NIT scheme instead of all the special programs. That way everyone get's the same safety net when they are unemployed or poorly paid and you can have unregulated at-will employment because employees aren't forced to negotiate for bare minimum.