What would it really take to save Europe’s single currency? The answer, almost surely, would have to involve both large purchases of government bonds by the central bank, and a declared willingness by that central bank to accept a somewhat higher rate of inflation. Even with these policies, much of Europe would face the prospect of years of very high unemployment. But at least there would be a visible route to recovery.

Yet it’s really, really hard to see how such a policy shift could come about.

Part of the problem is the fact that German politicians have spent the past two years telling voters something that isn’t true — namely, that the crisis is all the fault of irresponsible governments in Southern Europe. Here in Spain — which is now the epicenter of the crisis — the government actually had low debt and budget surpluses on the eve of crisis; if the country is now in crisis, that’s the result of a vast housing bubble that banks all across Europe, very much including the Germans, helped to inflate. But now the false narrative stands in the way of any workable solution.

Yet misinformed voters aren’t the only problem; even elite European opinion has yet to face up to reality. To read the latest reports from European-based “expert” institutions, like the one released last week by the Bank for International Settlements, is to feel that you’ve entered an alternative universe, one in which neither the lessons of history nor the laws of arithmetic apply — a universe in which austerity would still work if only everyone had faith, and in which everyone can cut spending at the same time without producing a depression.

So will Europe save itself? The stakes are very high, and Europe’s leaders are, by and large, neither evil nor stupid. But the same could be said, believe it or not, about Europe’s leaders in 1914. We can only hope that this time is different.