Margaret was anxious to place the dynasty of the North firmly within her line of descent. In 1389, she selected her sister’s grandson, Eric of Pomerania, then six years old, her successor, and he was thus proclaimed in Norway. In 1395, Eric was chosen king of Denmark and, in 1396, of Sweden. At his Swedish coronation in Kalmar, in 1397, Queen Margaret, who remained at his side as the real ruler, had the outline drawn of an _Act of Union_, which should forever unite the three Scandinavian kingdoms under one ruler. Each country was to preserve its constitution, laws and traditions unmolested, but they were to support each other in times of war. When a king was to be chosen, representatives of equal numbers from each country were to meet in Halmstad, the sons of kings to be favored by choice. This Act of Union was never carried into effect, according to legal forms. The sketch or outline of it, such as it is still preserved, was signed by representatives of the three countries, although not in equal numbers; but why Queen Margaret never allowed it to be enlarged into a legally binding document is not known. Her favorite idea was therein embodied, and she appeared to have an all-powerful influence over those necessary to carry it through.
Margaret made it her object to strengthen the crown and reduce the power of the nobles. She cared naught about keeping her promises to the latter, confiscating their castles and possessions, and annulling their privileges. When they complained, reminding her of her promises in her letters to them, she replied: “Keep my letters; I shall certainly keep your castles.” All nobles created by Albrecht were entirely deprived of their privileges if they could not prove their due qualifications. The majority of forts erected during the war were pulled down. No taxes were longer imposed, except through written order of the government. These reforms were all rigorously carried out, according to the “Restitution of Nykœping” of 1396. Margaret succeeded in a remarkable way in reducing to normal proportions the power and influence of the Swedish nobility. The nobles, who were all-powerful and absolutely unyielding in Albrecht’s days, bowed to her gracefully and received meekly her severe conditions. An explanation can be found in the fact that they had no leader of authority and power among them, after the death of Bo Jonsson Grip. Further, Margaret was careful not to fill the important offices of drotsete and marsk, when vacant, thus making the personal presence and interference of the sovereign necessary on all important occasions.