Empirical evidence suggests that spillovers from a fiscal expansion in one euro area country to others are positive, but small. So while it is important for those countries with available fiscal space to use it domestically to support overall stabilisation, a central fiscal capacity with the ability to allocate expenditure across countries would be more powerful.
A dedicated centralised fiscal capacity would not interfere with domestic policy. By focusing on common area-wide stabilisation it need not affect national fiscal space but rather provide an additional layer.