The German government wants the European Commission to suspend preparatory work on negotiations with Turkey about modernizing the EU-Turkey Customs Union because it would send the "wrong signal," a draft paper obtained by Reuters showed.

The paper also mentioned a number of other measures it would like to see implemented at the European level to raise financial pressure on Turkey to respect the rule of law.

It said that given developments in Turkey pre-accession aid (IPA) should be targeted "even more towards supporting democracy and the rule of law". It also said the European Commission should look into suspending all pre-accession aid to Turkey if the need arises.

It added that Germany expected the Commission to "shift funding away from Turkey in a way that is meaningful compared to the overall funding Turkey receives under the IPA schemes.

Previous week, Germany also threw warnings to the German companies operating in Turkey following allegations that Turkey launched an investigation into those companies on the grounds that they are financially aiding the terror groups. Yet, President Recep Tayyip Erdoğan slammed these warnings and all the government officials assured German investments in the country.

Prime Minister Binali Yıldırım hosted a meeting with the representatives of 19 German firms in Turkey, conveying the message that Turkey welcomes German investments and do not discriminate them on any grounds.

Turkey has been negotiating to expand the scope of Customs Union for a while and to have a say on the free trade agreements. The problem with the current Customs Union is that the deal only includes industrial products and even then, not all of them.