You are correct, they should have taken his license iso a fine.
Sorry I'm not sure I understand; do you mean they should have taken his licence as well or instead of being fined?
I'm not sure what other action was taken by/against the pilot in the aftermath in terms of licences and training but I would have thought the most sensible thing to do would have been some kind of mandatory retraining/re-education process to address airmanship deficiencies; the overall tone of the report suggested the pilot was somewhat overloaded by the situation and that sort of 'tunnel vision' which being overloaded creates is what lead to the incident which occurred.
I'm not sure what the situation is with regard to his licence being suspended because he held an FAA licence which was being used in Europe, not sure if the FAA were made aware of the incident or not or what action they would have taken. Certainly in the US an incident like that would have led to a review of the pilot in question and their licence/competence.
Fining (and why not prison for the worst offenders?) however is a good punishment for people who have knowingly broken rules with regard to flying without licences, forging maintenance paperwork and well established air law like not flying within 500ft of a person/structure.
It is a pretty poor punishment for incompetence though IMHO, in the same way that the general criminalisation of incidents/accidents that involve 'pilot error' is generally bad for flight safety.