Europe took interest in the conflict in America, and followed it closely. Austria sold arms to both sides (Lorenz rifles). Prussia studied the conflict, but generally regarded the conflict as of little importance to them - there's a commonly quoted saying from Helmuth von Moltke the Elder, that the US civil war 'consists of two armed mobs chasing each other around the countryside, from which nothing can be learned'. However, this quote has never been properly sourced, and might very well be made up.

Napoleon III of France was deeply engaged in Mexico at the time, supporting the Austrian Maximilian von Habsburg (brother of Emperor Franz Joseph of Austria) as Emperor of Mexico and since the US regarded it as a breach of the Monroe doctrine, he wanted to support the Confederacy in order to weaken the US. However, Napoleon III knew he needed the economical power and naval power of the British in order to do something, and the British were not interested at all.

While both French and British companies and banks sold arms and extended credits to the Confederacy (to be fair both also sold arms to the US), the British population was decidedly anti-slavery and in no way eager to go to war for the Confederacy. The Trent affair, in which the US boarded a British mail ship carrying two Confederate diplomats, seizing them, caused a huge uproar in Britain and a similar reaction against Britain in the US, however Lincoln knew the US could not go to war against Britain and the Confederacy at the same time and released the diplomats and decried the actions of the US campain who had seized them, casuing the controversy to die out.

The diplomatic resolution was partially due to the effort of Prince Albert, the consort of Queen Victoria, just before his death.