LONDON -- The European Union on Monday increased economic and diplomatic pressure on Iran by ratcheting up sanctions put in place against the country’s nuclear program.

“Despite six U.N. Security Council Resolutions calling for Iran to cease enrichment-related activities, Iran continues to choose the wrong path. It is enriching uranium on a scale that has no plausible civilian justification,” British Foreign Secretary William Hague said at a meeting of foreign ministers from the 27 EU countries in Luxembourg.

At the same meeting, EU foreign policy chief Catherine Ashton stressed the path to a negotiated diplomatic solution remains open.

“We have always said sanctions are not an end in themselves, but are there to apply pressure on the Iranian authorities to meet their international obligations,” Ashton said.

Tough measures
In addition to current bans on oil and gasoline imports from Iran, Monday’s package of measures addressed what the EU called its “serious and deepening concerns over Iran’s nuclear program,” by targeting Tehran’s funding of such schemes.

All transactions between European and Iranian banks will now be prohibited, unless they have been explicitly authorized by national authorities.

The import of natural gas from Iran into the EU will be banned, along with associated activities, such as transport and insurance.

EU member states also decided to stop supporting trade with Iran by ending short-term export credits, guarantees or insurance.

These new restrictions come amid growing concern among world powers of Iran’s lack of engagement in its protracted negotiations with the United States, China, Russia, Britain, France and Germany in their on-and-off talks, which have dragged on for years with little sign of progress.

Iran says ready 'to offer an exchange' on nuke issue

World powers accuse Iran of covertly using its uranium enrichment program to produce nuclear weapons. Tehran insists the research and development is to generate electricity and produce medical isotopes.

The ongoing negotiations have limped from meeting to meeting, with the world powers’ frustrations punctuated by occasional concessions by Iran and assertions of its willingness to engage with the international partners. Recently, Iran suggested it would halt its enrichment program in exchange for fuel for a research reactor.

Despite the protracted dialogue, diplomats hope that a negotiated settlement can be reached, with international sanctions providing an incentive for Tehran to engage more meaningfully.

Western intel: 'Small signs of wavering' on Iran nuke policy

Ashton told reporters in Luxembourg that she met recently with her Iranian counterpart, Saeed jalili, and “had left him in no illusion about our desire to make progress.”

Staggering economy
Although the EU says sanctions are not aimed at the Iranian people, the existing sanctions, backed by numerous U.N. resolutions dating back to 2006, began to bite this summer.

Hyperinflation in Iran is pushing up prices daily and the dramatic slide in the value of the rial against the U.S. dollar led to unrest in Tehran earlier this month, when angry currency traders clashed with security forces.

These new sanctions appear likely to add to Iran’s economic turmoil, according to analysts.

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Despite the tightening sanctions, U.S. exports to Iran rose by nearly one-third in the first eight months of 2012, according to data released by the U.S. Census Bureau.

The jump, to $199.5 million, was due chiefly to an increase in grain sales and hides a sharp drop in the value of exports of humanitarian goods, such as medicinal and pharmaceutical products, which fell to $14.9 million from $26.7 million in the same period in 2011.

Reuters contributed to this report.

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