I have the same "problem." Right now I have the PO's ordinary drapes over all the casements; they look OK, but I can't open a window! I was considering the swinging rods that prettyphysicslady noted, and also the possibility of mounting a rod on each casement, so that the curtain simply swings back with the window. I think that that would look best with lace or sheers, though, and I like something a little more substantial. But the swinging rods have the other problem of having to have room on each side of the window for the length of the rod. You can always do shades, mounted on the windows themselves, not on the frames. It's a conundrum, all right.

Swinging inward is an option and as a matter of fact a number of models of egress windows swing fully in. If they didn't meet code, they wouldn't make them. It's an easier way to fabricate french casements (no fixed stile up the center between the pair) and to have exterior screens, rather than interior. You could have a Roman shade that mounted fully above the swing of the windows that would pull all the way up out of the way to open the window. The traditional treatment is a very small rod mounted to each window with simple panels.

Check out sash curtain rods which mount almost flat on the surface. They come in traditional flat shape or small diameter rods. I like the film or you can use the window spray on frosting although you will need a steady hand or it won't be even coverage. If you do the spray, you can use make a pattern on the glass with narrow masking tape which leaves you a nice even area to look through but from the outside it is still difficult to see through unless you are right against the glass like a peeping tom.

Sheers are probably the best option. Otherwise you can get shutters and leave the slats open. Both good options. Probably comes down to style