Did the German state of Saxe-Coburg recognized the Confederacy? This was the birthplace of Prince Albert, husband of Queen Victoria. Given the dynastic ties, Saxe-Coburg could have served as a stalking horse for Britain’s interests in the South. Had Southern battlefield successes in 1861 and 1862 been more decisive, Britain may have recognized the Confederacy. Napoleon III would only have recognized the country if Britain did so. Had British and French recognition been achieved, the blockade would have been broken and the South had free access to European weaponry. Washington would then have sued for peace, and possibly conceded the border states.
In the long run, maybe that would have been a better solution, since it would have established the primacy of the states instead of the overwhelming power of centralized government that the Founders feared, and whose ramifications are very much with us today.