Greece said the threat of sanctions by the European Union against Turkey for sending an energy vessel and warships near the island of Kastellorizo could force a pull-back, but it backfired when Turkey's mission was extended 10 days.

Turkey has the research vessel Oruc Reis and 10 warships encroaching on Greek waters in the East Mediterranean, sending them back after German Chancellor Angela Merkel earlier persuaded Turkish President Recep Tayyip Erdogan to withdraw.

With the Greek and Turkish navy having ships shadowing each other and a tense standoff remaining, the EU said Turkey should stop its provocations and for the first time said penalties could be imposed if discussions aren't held or fail, said Reuters.

Greek government spokesman Stelios Petsas told state ERT TV that Turkey faces a “clear” message: “Either act to de-escalate (the situation) or face sanctions,” although the EU's foreign chief, Josep Borrell, said it's only a possibility and they would be staggered.

The EU urged Turkey to halt what it called its “illegal” prospecting activities. It said plans to blacklist Turkish officials linked to the energy exploration could be extended, which could possibly include economic sanctions against Turkey, although Erdogan has shown nothing but disdain for the tactic.

Turkey already had soft sanctions imposed for its drilling for oil and gas off Cyprus but kept right on doing it as the penalties exempted Erdogan and all politicians, targeting only executives of Turkey's state-run oil company.

Borrellspoke on the phone to Turkish Foreign Minister Mevlut Cavusoglu to brief him on the outcome of the EU foreign ministers' meeting, including measures the 27-nation bloc is prepared to take.

Turkey was given until Sept. 24 to comply with the demand to cease provocations or face the sanctions which Petsas is also gives Erdogan an “exit strategy” to end the standoff.

The two countries belong to NATO but the defense alliance said it wants no part of the troubles apart from Secretary-General Jens Stoltenberg saying he's trying to think of some ways to prevent a conflict but hasn't offered any yet.

Greece and Turkey have also conducted war games in the region as a show of strength against each other although Greece got the engagement of France, Israel, Cyprus and the United Arab Emirates.

"It is in Turkey’s interest above all, with its economy shaken and so many open fronts, to realize that right now Europe is offering it a way out … (allowing) the peaceful settling of our differences to define maritime zones between the two countries," Petsas said.

Greece said the Turkish prospecting for potential offshore gas and oil overlaps part of its continental shelf while Turkey said it has the right to be there under a maritime deal signed with Libya dividing the seas between them, unrecognized by any other country.

In response, Turkey said it was extending its prospecting from Sept. 2 to Sept. 12 leading the Greek Foreign Ministry to issue a statement calling its neighbor a “troublemaker and element of instability.”

“We invite Turkey to desist from its daily rants and work towards regional security and stability,” the statement said to no avail as Erdogan canceled planned talks when Greece signed an agreement with Egypt setting seas boundaries as a counter to the Turkey-Libya deal.

Petsas said in his interview that the government will announce in mid-September “a specific package to strengthen” the armed forces, but provided no further details. 

Press reports have speculated that the deal with France could involve Greece buying 18 fighter jets and two naval frigates, which would help reduce its much larger neighbor's considerable military superiority.

Growing more belligerent in the face of sanctions threats, Erdogan said Turkey was ready to pay for its efforts to defend its rights in the East Mediterranean, asking whether the people of Greece and France were ready to make the same sacrifices due to the “greed and incompetence” of their leaders.

A senior EU diplomat who wasn't identified told Reuters: “As well as sticks (sanctions,) there will be carrots too to get Ankara to engage seriously in dialogue. These carrots could be progress on a new customs union and more money for the refugee program.”

That's what Erdogan wants, the EU having held back 3 billion euros ($3.58 billion) of a 6-billion euro ($7.16 billion) pledge for Turkey to contain some 4 million refugees and migrants who went there fleeing war, strife and economic misery in their homelands.

Turkey also wants the EU to make good on promises for visa-free travel in the bloc and a fast-track entry into the union although that's essentially been dead in the water after Erdogan purged civil society, the military, courts and education system.

That was done in response to a failed 2016 coup attempt against him and has seen dozens of journalists and a human rights lawyer dying in mail after a hunger strike, the EU not talking about that so far.

(Material from the Associated Press was used in this report)