What about a patchwork or overdyed carpet?

http://www.carpetbasket.com

If you want to keep the couch just put some pillows on it that will make it look more comfortable

This are some ideas

For the wall...that depends how you want to decorate but here are some of my ideas

I would use like a navy blue that's a darker blue. For the last picture with the 3 stripes I would do it different I would to the most right line about 80 cm then leave an empty space of 30 cm and then the next blue line would be about 55 cm and again a gape of 30 cm and the last line I would do around 15 cm. I would paint this behind the couch on the right side where your window is. I hope this is not to confusing

Another idea is just paint a horizontal line about about 80-90cm and also navy blue you could hang a few picture frames in that line. I would suggest white picture frames and one should be a deep red as an accent. I am sorry could not find any pictures that would describe best my idea

This are a few ideas for your rug. I prefers the white saggy rug but this is up to you what you like most.

To the curtains

If you like dark colors I would go with navy blue for you curtains. I personally think its not a good idea to paint your complete wall a dark blue because your couch is blue that will just look like your wall is swallowing your couch :). I think stripes are better.

But here is also a picture if you want to accent with yellow.
You can also accent with red just not to much you can use for an accent pillow red or a picture frame maybe a little in the rug or curtain or anything els you decorate with but be careful to not use to much.

thanks so much guys!@luna i love the stripe idea but i already hav horizontal stripes in my boys bedroom meaning blue and white is it advisable to than go with stripes in the lounge as well?and i do love the idea of plain curtains:) i think they will work best!
@kelly that world map is gorgeus , and i love the malena mandallon pillow with just the right amount of yellow:) i think that will be a great way to introduce my yellow in:)and yes we do have guys who make tables and lamps what did you have in mind?
sorry but just one question should i paint walls first or get rug n curtains first ??

Rug first- then choose paint. You can match the paint easier to a rug than trying to find a rug to match a paint color.

Panel the sofa back wall with laquered glass and MDF grill boards like in the picture attached. In this picture we have taken the grill board design in between 2 pillars of italian marble but you take glass at the place of italian marble and grill board with the background of plain wall. The color scheme shoumd be black glass, grey base paint and white MDF carving. The panel sizes can be - Glass pillar - 3 ft wide and full height, MDF also 3 ft wide of full height. Glass pillars should be +3 inches from wall.