"We as a commission cannot behave as if nothing happened," the EU's Justice and Consumer Protection Commissioner Vera Jourova said at a news briefing.
"I want the national authorities to gain the best protection and best redress within the legal framework... as quick as possible," she said.
VW admitted in September 2015 to building so-called defeat devices into millions of diesel cars, which detected when the motors were undergoing regulatory tests and drastically reduced emissions.
Brussels has been under fire for dragging its feet against Volkswagen compared to the US, where authorities not only exposed the wrongdoing, but secured a $16.5-billion (€14.8-billion) settlement from the Germany-based automaker.
But the commission, the EU's executive arm, complains it currently lacks the authority to fight Volkswagen and can only nudge member states to apply European laws.
Volkswagen is committed to retrofitting millions of European cars and argues that paying out even a fraction of what has been agreed for US drivers would quickly bankrupt VW.
The company's arguments have particular resonance in Germany, Spain and central Europe, where VW is a major employer and invests heavily.
While the payments in the US concern some hundreds of thousands of vehicles, around eight million cars with the affected diesel engines are on Europe's roads.
The European Commission believes Volkswagen broke consumer protection and dishonest trading rules by claiming to meet EU standards in its advertising.
Once pursued, that could expose the firm to compensation claims from individual buyers.
Jourova said consumer protection officials from the 20 member states that found VW had infringed European rules will meet in Brussels on Thursday to discuss the next steps.