"German goods have a high-quality standard. That is such a valuable asset to have, so VW has to sort this out very quickly."
But despite the alleged wrongdoing, Dijsselbloem stressed that the automaker shouldn't be fined out of existence.
The U.S. Environmental Protection Agency accused VW in September of cheating on its emission tests for it diesel powered cars. The German auto giant has since acknowledged that it installed software known as "defeat devices" in diesel vehicles issued between 2009 and 2015.
VW could face U.S. fines of $37,500 per vehicle, the U.S. Environmental Protection Agency told reporters last week. With around 482,000 of its diesel vehicles sold in the U.S. since 2008, this could mean a penalty of up to $18 billion - significantly more than fines imposed on GM and Toyota in recent years.
"A fine needs to be effective against those who broke rules, but also needs to be effective... in correcting behavior (and) the worst way to do that is to kill the company," Dijsselbloem said.
"(I) think there is a case for greater co-operation between the EU and U.S. Let's not go over the top."