One of the German government's closest economic advisers has warned the euro has a "limited chance of survival" and may only last for another five years.
Under Madame Lagarde, the IMF is having some second thoughts about cutting deficits.
Germany's second largest bank Commerzbank slid as much as 14% today after it said it will sell €2.5bn to repay the government and insurer Allianz amid a company restructure.
Following an apparently disappointing outcome in 2012, there is greater optimism over growth prospects for the UK and other economies in 2013.
Germany's GDP slumped by the most in four years in Q4 2012, with French, Italian and Japanese growth also contracting more than expected on the quarter.