The European Union’s new directive banning any cooperation with Israeli institutions over the Green Line isn’t new, and is actually being implemented for Israel’s benefit, according to the office of the EU’s foreign policy chief Catherine Ashton.

The directive contains two main planks: denial of European funding to, and cooperation with, Israeli institutions based or operating over the Green Line, and a requirement that all future agreements between Israel and the EU — and possibly between Israel and individual member states as well — include a clause in which Israel accepts the European Union’s position that all territory over the Green Line does not belong to Israel.

As Ashton’s office noted in a statement sent to The Times of Israel Tuesday, the directive was “in conformity with the EU long-standing position that Israeli settlements are illegal under international law and with the non-recognition by the EU of Israel’s sovereignty over the occupied territories irrespective of their legal status under domestic Israeli law.”

The European Union has indeed long held that view. It won’t invest or cooperate with communal or civic organizations over the Green Line, and has been one of the most reliable critics of Israeli settlement policy for decades.

Even the details of the directive aren’t new. On December 10, 2012, the European Union’s Foreign Affairs Council stated that “all agreements between the State of Israel and the EU must unequivocally and explicitly indicate their inapplicability to the territories occupied by Israel in 1967.”

But the fresh directive is still sending a shock wave through Israeli diplomatic circles — not because anyone is surprised about the position it takes, but because of the precision with which the EU indicates it is to be implemented.

“They crossed a line,” a senior Israeli official told The Times of Israel Tuesday. “That the EU won’t sign an agreement with Ariel University [in the West Bank] is no secret. But now they are going to force the Hebrew University to promise that no scientist working on a program [that enjoys EU cooperation or funding] lives over the Green Line,” including in apartment complexes down the street from the university campus on Mount Scopus — “or in the Jewish Quarter of the Old City, which has been Jewish a bit longer than the EU.”

“That’s absurd,” the official said. In adhering blindly to the Green Line, he claimed, the EU is in effect taking sides in the conflict in a way that distances its position from that of the majority of Israelis who support negotiations and a two-state solution. Indeed, the move has raised hackles with some on the Israeli left, which usually sees EU institutions as allies in the pursuit of peace.

As another official noted, the EU’s new policy is in effect demanding that Israel deny — in writing — any rights to the Western Wall, adjacent to Judaism’s holiest site, as a precondition for signing any agreement with the EU.

Ashton’s office tried to explain that the development was a positive one for Israel.

“This is important in view of the new opportunities that will be offered to Israel (as an ENP [European Neighborhood Policy] partner) for participation in EU programmes and other funding instruments in the 2014-2020 financial framework,” read the statement issued to The Times of Israel.

“We want Israel to play a full part in these instruments and we want to be sure that Israel’s participation is not put in question so that Israel will be able to make use of all possibilities offered by the new financial framework,” it added.

Or, in short: This is for your own good, to prevent any future challenges to your ability to get further benefits from the EU down the road — a carrot-and-stick approach where the carrot is further integration into the EU economy, and the stick is the inability of any institution operating over the Green Line to enjoy the fruits of that integration.

A spokesman for the EU delegation in Israel told the Associated Press that the new guidelines would not affect Israel’s private sector or companies, but rather bodies like research centers or NGOs. That didn’t stop the Israel’s Manufacturers Association from worrying about the “obstacles” the EU was placing in the way of further economic ties.

For decades, European bureaucrats have been hard at work building a world of unbreakable rules and regulations. Applied to a messy, unresolved conflict, the decision to apply one set of rules over another — adhering to the demands of the pre-1967 lines, for example, at the expense of major Israeli population centers beyond those lines — would appear to the Israeli critics of the move to involve choosing sides in the larger conflict.

Others on the left see it differently. Labor’s Nachman Shai didn’t praise the EU move, but did regard it as the unfortunate consequence of the government’s misguided, pro-settlement policies, which he said were gradually causing Israel’s isolation. Meretz leader Zahava Gal-on called the directive “very significant,” in distinguishing between sovereign Israel, on the one hand, “and the settlements and occupation,” on the other. Europe, she said, was telling Israel that it can’t simultaneously expect to maintain international credibility as a seeker of peace while building in the settlements.

Gal-on’s take was unsurprising. So, too, the outraged protests from less dovish Israeli leaders.

What was striking about the latter, though, was that they extended their criticisms to assert that the EU was demonstrating an incapacity to function as a fair-minded peace broker. And that was because, if it does indeed truly seek to implement its latest directive, and condition further dealings with Israel on a government acknowledgement that all territory beyond the Green Line is not part of Israel, the EU may have issued a demand to which few mainstream Israeli leaders will acquiesce.