compared to the North, undercut the ability to sustain and wage war. Rampant inflation as well as food shortages in the South lowered morale. THE RELATIONSHIP WITH EUROPE From the beginning of the war, the Confederacy placed great hope in being recognized and supported by Great Britain and France. European intervention in the conflict remained a strong possibility, but when it did occur, it was not in a way anticipated by either the Confederacy or the Union. Napoleon III of France believed the Civil War presented an opportunity for him to restore a French empire in the Americas. With the United States preoccupied, the time seemed ripe for action. Napoleon’s target was Mexico, and in 1861, a large French fleet took Veracruz. The French then moved to capture