In a wide-ranging speech at the German Council on Foreign Relations think tank in Berlin, Ms Lagarde also called for an additional $500bn (£320m) for the IMF as it seeks to keep afloat countries battered by the crisis.
And she had a dire warning for policymakers if they failed to do what was necessary, saying the world could slide into a "1930s moment" of isolationism, which led to the Great Depression and eventually to world war.
On the eurozone, Ms Lagarde acknowledged that a great deal had already been accomplished but that the policies agreed so far "form pieces, but pieces only, of a comprehensive solution."
Read the rest at The Telegraph (UK)IMF chief unveils euro plan and warns of '1930s moment'
by Agence France Presse
"Even these lower forecasts assume a constructive policy path that is by no means assured," she cautioned.
And she warned that if policymakers failed to grasp the seriousness of the situation, "we could easily slide into a '1930s moment'."
"A moment where trust and cooperation break down and countries turn inward. A moment, ultimately, leading to a downward spiral that could engulf the entire world."
However, Ms Lagarde said, "I believe we can avoid such a scenario ... although the economic outlook remains deeply worrisome, there is a way out."