Despite being relatively new to Sauer (compared to the majority of competitive players) and awfully ignorant of any of Sauer's previous releases and how they played out, I came from AssaultCube. Bear with me a second, I'll share my experience of what happened in the aforementioned game the last time a discussion about weapon balance came about. 
So yeah. In AssaultCube, the only competitive weapons are the Assault Rifle and the Submachine Gun. They are both hitscan-style guns, and as they were mostly commonly used in competitive matches, both were subject to much discussion as far as balance was concerned.
The general consensus was that, in the previous release of AC (1104), there was too much spread on the Submachine Gun, and too much recoil on the Assault Rifle (recoil is when your gun/crosshair moves upwards as you're firing bullets). To counter that, the developers of AssaultCube decided to lower the recoil and damage on the Assault Rifle and lower spread on the Submachine Gun, but increase recoil - in theory, balancing the two guns perfectly for the new release (which is the current release now).
However, what actually happened was that those who were able to control the recoil on the Submachine Gun were incredibly advantaged as statistically, the weapon got a massive boost and the face-to-face time to kill was much lower than on the Assault Rifle. Overall, what you get is that a way to buff a gun without making it a "noob weapon" is to add some other mechanical factor of skill that goes into controlling the gun.

Keyword: controlling.
Since spread is random (wtf is the pattern it uses in Sauer anyway?), you cannot control it. There is no effective way to reduce spread since it doesn't increase incrementally, it's just random - ie: you can hit two bullets out of every MG clip, or you can kill two people with every MG clip, regardless of how fabulous and flawless your aim is. Pulse firing is useless, burst firing is useless, to some extent even getting an advantageous angle on your enemy in an engagement is useless.

So it stands to reason that if you remove spread, the gun then removes the chance of error for people aiming well, thus increasing the consistency of the results one may achieve with it. However, in my opinion, this would overpower it.
I'm not against the idea of no spread, but I feel as though there should be some other sort of compensatory nerf made to the gun in order to make it something you do need to have some amount of skill to control. Again, I'll bring up the concept of recoil here. Recoil will probably be unpopular with the majority of people reading this blog since it's unheard of in Sauer, but the fact of the matter is - I don't care. Regardless of your feelings toward recoil, it is controllable since it is constant, and thus takes practice in order to be able to control effectively.  I understand the trepidation as far as adding recoil is concerned - since I come from a game where recoil is just seen as an every day thing (although, still not everybody has learnt to master it yet), some people may accuse me of manipulating the weapons in the game to better fit my own skill set that I've developed and thus gain an advantage over others (I'm not, but I take your point).


So, the other thing that could be done, is simply to reduce the damage, as Acuerta said. If spread is low or non-existent on the mg, it will take seven shots to kill a player in effic-based modes. I would be happy for either:

a) the damage to stay the same, but the MG clip be reduced to 10 (any player who aims well should be able to consistently get one kill per clip in effic-based modes)
b) the MG to become similar to the LG in quake. I'm by no means the most qualified person to talk about the LG or quake here, since I only have a basic account and I only follow the competitive scene via streams/etc, I'm not (nor do I have the skill/any desire to be) involved in it at any noteworthy level. But the way the LG is handled in quake is pretty much perfect. There seems to be very slight recoil, no spread, and low damage per bullet (they call it "shaft" tho) that is hit. And yet it's still the weapon most people default to in CA or even sometimes duel games. 
I'd also support option B over option A because the speed of Quake is more comparable to the speed of Sauer than the speed of games like AssaultCube which use recoil.

But yeah, as things are atm, the MG is horribly unplayable and IMO the worst thing about Sauer atm.