It’s a small step, far too little, but a significant symbolic move. Noam Sheizaf explains in +972 magazine:
The European Union’s new guidelines regarding the settlements were the talk of the day in Israel yesterday (Tuesday), and they are still the leading story in all the morning papers. The feeling is that for the first time, an international body has taken a real measure to limit Israeli activities in the occupied territories.
There has also been a lot of misinformation and a lack of clarity in the media regarding these guidelines. Here are some clarifications from a European source regarding the Commission Notice (this is the exact term).
Technically, the Commission Notice does not apply to agreements but to EUgrants, prizes and programs (though the logic is the same). It applies to EU-funded programs but is not binding to member state programs. It means that Ariel University, for instance, cannot benefit from EU funding, but a member state can decide to fund it or conduct a joint program with it.
The Commission Notice does not apply to individuals nor to government entities, such as the Israeli Justice Department or the Jerusalem Police headquarters, which are located in East Jerusalem, beyond the Green Line.
This morning, some Israeli sources have told the media that the Commission Notice will hurt the Palestinians, too. It is therefore important to note that the Commission Notice (naturally) exempts the Palestinian Authority from it, as well as any “humanitarian project.”
My source also insisted that Israeli officials were updated throughout the process, and therefore Israel cannot claim that it was ambushed or caught by surprise by of the new guidelines.
Another point, which is not exactly about the guidelines themselves but more about their meaning: the Commission Notice clarly states in its first articles that “The EU does not recognize Israel’s sovereignty” in any of the territories captured in 1967, including the Golan and East Jerusalem, “irrespective of their legal status under domestic Israeli law.” While this has been the European policy for years, the article makes it clear that without an agreement, Israel will not be able to treat the so-called settlement blocs and East Jerusalem as its own territory in the way it has been trying to do recently.