The correct option is:
They refused to recognize the Confederacy as independent.
After overcoming the Union forces at Chancellorsville, Virginia, Confederate General Robert E. Lee resolved to attack the North looking to discourage the enemy and maybe persuading European countries to recognize the Confederacy. The Battle of Gettysburg (1863) ended in the Southern defeat. By the end of this battle, any remaining hopes of European recognition of the Confederacy were ultimately dropped.