They key thing (and its weakest point) is this document presents a package that is foreseen as coming together as one piece. There is no indication in it as to how the EU envisages (and would support) a process leading to the outcome they want. Since Arab countries , whose willingness to declare they will live in peace with Israel (and walk the talk in doing so) is crucial to the success of this kind of initiative, can be counted on to fail to rise to the occasion (Jordan and to a lesser extent Egypt excepted)- the whole thing has little chance of taking off. Realistically, the EU may huff and puff but the bottom line is that they actually need Israel as a reliable, stable, militarily capable ( and democratic) state in the region. They do business with everyone - but it is actually Israel and the enforced stalemate achieved through Isareli power that keeps things sufficiently stable. So they won't really do anything - fortunately.
from the article: Haaretz Exclusive: EU draft document on division of Jerusalem