The European Union has repeated its frequent call for Greece and Turkey to try to negotiate a solution to a dispute over East Mediterranean seas in Greece's territory and said that otherwise sanctions could be on the table for Turkey.

Turkey has the research vessel Oruc Reis and 10 warships near the Greek island of Kastellorizo, 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.

Erdogan had said earlier he was willing to negotiate on the condition that Greece make concessions and as he insisted some Greek waters belong to Turkey under a deal he signed with Libya dividing the seas between them.

But he canceled planned talks in Ankara when Greece signed a similar agreement with Egypt, setting the current roulette in motion and bringing the countries to a point of conflict which the EU – led by Germany – is trying to stop.

The bloc's 27 foreign ministers have twice met and refused to even seriously discussin sanctions but that is changing as Turkey shows no signs of talking, the lines of communication with Greece essentially broken off.

A senior EU diplomat who wasn't identified told the news agency that, “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.