Yes a completely free rein.
Partly because there is no-one to rein them in. Partly because the EU never wastes a good crisis and the emphasis is purely on showing strength, discussions of how much damage this could do them long term are pointless. They'll pay any price, as it isn't actually them paying it.
Mainly though because the civil service hasn't actually done anything to prepare for brexit. And the EU know this. I've had mixed reports as to whether they've really tried, but bear in mind that Hammond is in the treasury so effectively controls things. If the civil service were actually preparing to leave in 2019 they'd be taking on more staff to manage their newly reacquired responsibilities. But they aren't and no end date has been set. It could be they've requested more resources and been rebuffed by the treasury. I'd think it more likely that department by department they've just decided that brexit would almost certainly embarrass them.
Hence the absurdity of various EU inclined personalities calling for a single European Army, and the UK prime minister saying that she supports their aims and objectives. The slings and arrows I received on the EU army thread during the referendum seem somewhat bittersweet now.
"Its absolutely the wrong time to be floating proposals for more power to the EU, when EU citizens, pretty much across the union, are demanding less"
It's the perfect time to show or bluster strength when everyone else is weak, they don't need a democratic mandate as they aren't democratic. :)
You and I might think they're playing with fire however it is the national governments who reap the consequences, not the EU in it's many guises and forms. In short they're insulated from it and don't really care. You could, for instance, have a 100% eurosceptic European parliament and aside from prettified words nothing would change or reverse.
The inflexion point we previously discussed is becoming rather crucial. If the FDP roll over and have their tummies tickled, as I expect, then the "EU Stronk" meme gains traction. I can't put my finger on anyone who will call their bluff.
If on the other hand the FDP stand by their supposed policies it could cause serious and embarrassing problems.
Not sure I'd put money on a German government being formed any time soon. The long grass serves too many interests at present.