From the year 1508 Margaret's life is no longer a private one. The part she took in politics from the date of her investiture as Governess of the Netherlands until her death belongs to European history. By her talents, ability, and rare aptitude for business she eclipsed more powerful rulers, and soon became the pivot of political life in Europe.

Strong as she was in the qualities her father lacked, she yet knew how to defer to his wishes, whilst holding strongly to her own opinions, and was always an affectionate and dutiful daughter. Maximilian's radical inconstancy and indecision of temper led him into many troubles, and his extravagance involved him in perpetual pecuniary difficulties, which destroyed all dignity of character; but he seems to have had the greatest admiration and respect for his clever daughter, to whose wise judgment he constantly deferred, as his many letters to her testify.

The warlike Pontiff, Julius II., had announced his intention of 'driving the barbarians out of Italy by force of arms.' He it was who first instigated the League which was to prove so disastrous to France, and was to be the cause of so many years of bloodshed in Italy.

Julius II. had been favourably impressed by Margaret's exemplary piety, and the respect and deference she had shown towards the Holy See. On several occasions he willingly granted her requests, and also sent her many relics and objects of devotion, amongst others two thorns from the true Cross, which, until the eighteenth century, were still preserved at Brou.

The League so desired by the Pope, known to history as the League of Cambray, was soon brought into discussion between the great powers of Europe. Two subjects were to be negotiated at the conference: the one consisted in the reconciliation of the Duke of Gueldres with the government of the Archduke Charles, and the other, which was to be kept secret, was the formation of a league against the Venetians. The princes who were to take part in it were the Pope, the King of France, the Emperor Maximilian, and Ferdinand, King of Aragon. Henry VII. of England, whose daughter Mary was betrothed to the Archduke Charles, had a direct interest in the Congress, as the Archduke's affairs were, ostensibly at least, the principal subject of the deliberations, but he does not seem to have been invited to join it. He begged the Archduchess Margaret, through Edmund Wingfield, to combine with the Cardinal of Amboise, in order that Ferdinand might be excluded from the negotiations and from the intended treaty; but the result was such as might have been anticipated—Henry did not exclude Ferdinand from the League, but Ferdinand excluded Henry from all advantage in it. This exclusion was so complete that, whilst the King of Hungary, the Duke of Milan, the Dukes of Savoy and Ferrara, and even the Marquis of Mantua were invited to join it, Henry's name was not even mentioned, though, as an afterthought, his ambassador was allowed to be present at the meetings. Moreover, the emperor and Ferdinand, who until now had been at variance, were reconciled, and postponed their differences concerning the regency of Spain until the war against Venice should be concluded.

On October the 8th Maximilian wrote to Margaret from Schoenhoven in answer to a letter of hers asking for his permission for the Papal Legate to confer the rite of confirmation on the Archduke Charles and his sisters.

'Very dear and much-loved daughter,—We have received your letters in which you tell us that you think it well that the Legate should, before his departure, confer the holy Sacrament of Confirmation upon our dear and much-loved grandchildren, and that he has agreed with you to do so; but because our dearly loved grandson Charles is at Lyère, you do not know which we prefer, whether our said grandson should be brought to our granddaughters at Malines, or our granddaughters to him. In consulting our wishes in everything you give us much pleasure. Wherefore, very dear and much-loved daughter, we inform you that we are content that our said grandson travel to Malines to receive the said holy Sacrament and the benediction of the said Legate, in our name and his. And for this reason we are now writing to our very dear and loyal cousin the Prince of Chimay to take him there. Until then, much-beloved daughter, may our Lord have you in His holy keeping.'[33]

On the 27th of October Maximilian again wrote to Margaret informing her that 'he has heard that she is preparing to go to the Congress of Cambray. As he is told that a great number of strangers are expected, he advises her to engage all the houses on one side of the town, and to leave the other half to the Cardinal of Amboise. She must,' he says, 'take the English ambassadors to Cambray, especially Wingfield, and admit them to the deliberations. If an ambassador from the King of Aragon come, she is to ask him whether he is provided with authority from the king, and if he is, to admit him.'

He tells her that 'his ambassadors have not yet gone to England, because he has not had time to furnish them with instructions. He has now ordered them to set out immediately, and will send the instructions after them.' Breda, 27th October 1508.[34]

In November 1508 Edward Wingfield wrote to Margaret to inform her that 'Henry VII. has it much at heart that the affairs of the Emperor and the Prince, his son (Prince Charles, his grandson), should be settled to the greatest advantage in the approaching Congress of Cambray, and that their enemies should be entirely discomfited. As long as the alliance between the King of France and the King of Aragon continues, he says, it is to be feared that the principal enemy of the Emperor and Prince Charles will triumph. For if he be assisted by France, the King of Aragon will most probably be able, not only to keep the usurped government of Castile in his own hands, and the other dominions belonging to that kingdom, as long as he lives, but also to deprive the Prince of his right of succession. To prevent this, it seems to Henry that the best plan would be to exclude the King of Aragon from the treaties that are to be made at Cambray, and to sever the alliance existing between him and the King of France. The King of Aragon has usurped the government of Castile only by means of the help of the King of France. If he were to be isolated, he would be unable to preserve it, and the Emperor would have it in his power, aided by those who are inimical to the King of Aragon, to take the government of that kingdom into his own hands....'[35] Margaret also kept ostensibly on the most friendly terms with Louis XII., whose correspondence with her about this time shows that to him at least she concealed her hatred of France. In each of his letters he takes a pleasure in reminding her of their early friendship and of their childish games, in the days when she was 'la petite Reine' at Amboise.