This is why I conjoined socialist with corporatist, which is the EU model of tempered capitalism. The successive power grabs made by the unelected institutions have given them primacy over the minutiae of an array of matters that constitute social policy, all of which combine neatly with the judicial activism of the ECJ to amount to a model of social reform without a democratic mandate. This is particularly notable on issues of "equality" and employment law, but legal bases in the treaties such as freedom of movement are also used to creep towards control of nation states' economic policies to produce socialist outcomes- note that we must now extend full unemployment and housing benefits to recent migrants who have no family connections to their chosen state.
The EU is extraordinarily undemocratic, not just as a result of the structure of its institutions, but also because it has no effective rule of law and, as you have pointed out, its more powerful constituents just make up the rules as they go along. The Commissioners are not appointed by member states, but are nominated, before being vetted by the Commission itself. Ideological purity is one of the important criteria, and the ideology preferred includes commitment to "ever closer union", which is just what most Europeans oppose. Furthermore, the Commission has overwhelming power within the EU (Germany's diktats are the only thing which trumps it). The Commission has legislative initiative, allowing it to set the agenda as well as the detail of the EU's program, to which the EP may only benignly assent. Should the EP reject a proposal, it just reflexes back to the Commission to try again. Further, the Commission has full powers of enforcement, and acts as chief prosecutor. It is also the EU's civil service. There is no more over-powered and unaccountable institution in the nominally free world.
Were that not bad enough, much of the decision making process in reality occurs outside the treaty-mandated institutions. Firstly, the Commission is continually lobbied and bribed through trilogues, the loudest voices of which are the larger European corporations which the EU unfailingly protects. Secondly, the ECJ regularly annexes power to itself, often resulting in huge quasi-constitutional changes without any democratic mandate. The classic judgment is Van Gend En Loos, in which the ECJ gave EU legislation direct effect on individuals within member states, and naturally gave itself jurisdiction over this. But that is just one of many. Finally, when things get a bit nasty and there is no clear legal basis for the EU to get rough with a member state, the rules as they are can simply be ignored. We see that with the German finance minister threatening Greece with suspension (no legal basis), the ECB suspending liquidity (despite the ESF, and with no legal basis and, worst of all, treaties that have been democratically rejected again and again being implemented anyway (c/f the "Constitutional Treaty", now the Lisbon treaty).
The EU represents the takeover of a benign free trade arrangement between democratic states by a unaccountable bureaucratic class which pervades the institutions and which is committed to a creeping, undemocratic centralisation of power, and to using that power to enforce an outdated social and corporatist agenda. It is now very different from a free trade area, and it is going to become more different still. The commitment to "ever closer union" is, in itself, taken as license for the institutions to grab more and more power and to legislate or regulate everything they possibly can.
