The view was presented in a regular assessment of the economy of the 19 countries sharing the euro, at a meeting of euro zone finance ministers on Thursday.

"The sum of our current fiscal policy advice to each euro area member implies a broadly neutral aggregate fiscal stance for the euro area," the IMF said.

The European Commission said last year that the aggregate fiscal stance of the euro zone should be expansionary to the tune of 0.5 percent of GDP to address the euro zone's negative output gap.

But the IMF said a looser fiscal stance to address that would not be consistent with fiscal sustainability at the individual country level nor with EU budget rules -- the Stability and Growth Pact.

"Instead, a more accommodative overall stance would require the creation of a central fiscal capacity (CFC), which the monetary union needs to offset large, adverse country-specific shocks," the IMF said, referring to a politically very sensitive idea of creating a separate euro zone budget.

"But this will take time, and building political support will depend on the credible enforcement of existing fiscal rules," it said.

The Fund said the existing rules were to complex and should instead focus on a single fiscal anchor and a single operational target, together with more automatic enforcement.

"The rules could also be reinforced by making access to central funds conditional on compliance," it said.

(Reporting By Jan Strupczewski)