Turkey on Wednesday rejected the EU warning as the Commission issued a critical report on Turkey, stopping short of suspending EU membership talks but telling Ankara to make progress on key issues, especially Cyprus, or face the consequences.
Turkey rejected any link between the Cyprus problem and its accession talks, saying that the responsibility of keeping Ankara's membership bid on track 'falls more on the EU.'
"The Cyprus problem is a political problem and it does not constitute an obligation with respect to our negotiation process, which is of a technical nature," a government statement said.
"An EU summit decision (in mid-December) that will guarantee the sustainability of the (accession) process will depend on the political vision of EU leaders regarding the EU's future," it said. "The responsibility at this point falls more on the EU than Turkey."
The rejection came after in a much-anticipated annual report on Turkey's progress on EU reforms, the commission highlighted human rights problems, including the use of torture and women's and minority issues.
But the thorny issue of Cyprus, an EU member, is most likely to scupper Turkey's ambitions.
"The commission will make relevant recommendations ahead of the (14-15) December European Council (EU summit), if Turkey has not fulfilled its obligations," the European Union's executive arm said in its report.
"No progress has been made on any aspects of normalising bilateral relations with the Republic of Cyprus," it said, warning that "failure to implement its obligations in full will affect the overall progress in the negotiations".
EU Enlargement Commissioner Olli Rehn would not be drawn on what recommendations the commission might make, but insisted that a "win-win" solution was possible.
"I have urged EU member states to ... support the Finnish formula," Rehn said as the report was released, "this is likely to be the last opportunity to make serious progress in the years to come."
Finland's initiative to break the impasse includes the resumption of trade at the port of Famagusta, in Turkish northern Cyprus, and the transfer to United Nations control of the ghost town of Varosha, a suburb of Famagusta, formerly inhabited by Greek Cypriots.
Speaking shortly before the release of the report Turkish Prime Minister Recep Tayyip Erdogan criticised "negative campaigns" in his country against the EU, but refused to back down on Cyprus.
Turkey refuses to open its air and sea ports to vessels of the internationally recognised Greek Cypriot government that controls the south of the divided island, despite a protocol it signed extending a customs deal to all other members of the 25 nation bloc it is seeking to join.
"We said, 'Don't expect any ports from us unless you end the isolation of the Turkish Republic of Northern Cyprus'," Erdogan told reporters in Ankara.
Cyprus, like all EU nations, can veto enlargement decisions.
"What we want is not that Turkey doesn't continue the accession process," a Cypriot spokesperson in Brussels said. "Our goal is that it continues but it has to satisfy the rules and for the moment it doesn't satisfy the rules."
The commission said that while Ankara had made limited progress in some areas, including the fight against corruption and in foreign and security policies, too often legislative reforms were not matched by implementation.
"The pace of reforms has slowed during the past year," it said.
Also the Turkish armed forces "have continued to exercise significant political influence".
On corruption it was equally clear: "Corruption remains widespread in the Turkish public sector and judiciary, despite the efforts in recent years."
There was more criticism over the human rights situation and of Article 301 of the Turkish penal code which penalises insulting Turkishness and the state.
While stating that freedom of religion and worship "continues to be generally accepted" persisting problems were highlighted, including legal and property restrictions on non-Muslim communities.
It also highlights discrimination against the Alevi and Roma minorities.
Turkey also has a long way to go on women's and children's rights, the report said, with the birth of girls not registered in parts of the south-east of the country.
Straddled between the Middle East and Europe, Turkey is seen as a strategic point of influence for the Muslim world and its EU candidacy has been strongly backed by the United States and Britain.
But countries like Austria, France and Germany would prefer a "privileged partnership" for Turkey to full membership.