In the middle ages nations used to default on their debts all the time. The reason is because the major banks of the days lent money to the monarchies, not to the nations themselves.

 As James Steuart explained in 1767, royal borrowings remained private affairs rather than truly public debts. For a sovereign’s debts to become binding upon the entire nation, elected representatives had to enact the taxes to pay their interest charges.

 By giving the people a voice in their nation's affairs, they also took on the responsibilities. No longer did creditors have to worry about their loans being canceled when a king died or was overthrown.
   Capitalists backing democracy became strictly a wise business decision.

  However, it was never a real alliance. The primary interest of capitalists was to get their money back, with interest, and to gather power unto themselves. For instance, they have never supported real democracy, because democracies tend to support ideas that are for the greater good of the most people.
   For instance, for the last century popular (and short-lived) governments in Africa, Asia and Latin America that tried to introduce much-needed land reforms were quickly labeled "communist" and overthrown by CIA agents, the local aristocracy, and the Marines (if all else fails).
  Nevertheless, the financiers of the world allowed modest social programs and reforms (within limits) in the name of battling a much greater threat to their wealth and power - communism. Through their fully-owned media outlets and think tanks, they constantly pushed the idea that capitalism and democracy were one and the same.

  Sometimes, like in America, the propaganda works.
Remember in the days after 9/11? The first-responders, the firemen and policemen of America, were heroes of the right-wing. Brave and selfless.
   Once push came to shove with the economic meltdown in 2008, those very same first responders were now "parasites living off the public dole". At least to the right-wing. Their bravery and selflessness was completely forgotten.

Another example was the "essential workers that kept the economy going" during the pandemic. These people took extra risks with their health and their lives so millions could work from home. Yo would think they would get rewarded for their sacrifice.
They weren't. Instead the wealthiest man in the world took an expensive trip into space, and they said directly into the camera that those "essential workers" paid for it. So when those same workers decided to unionize, one of the wealthiest and most powerful companies in the world spared no expenses (not to mention broke all sorts of laws) in order to crush these "essential workers".

Perhaps you've seen that fable by libertarians online: Democracy is two wolves and a sheep deciding what to eat for dinner.
I admit that it's clever. It almost sounds true, if you don't think about it too hard. But I've done the one thing that no one else does - I asked them to give an historical example of when this happened.
Not a single one of those libertarians even replied.

  With the fall of the Soviet Union, that threat ended. The primary reason to endorse democracy ended. Now they only desire compliance. Now they only endorse the appearance of democracy.
   You are allowed to vote, but only if your vote doesn't matter.

The overthrow of democracy in Europe

  Greek Prime Minister George Papandreou made a HUGE mistake.
When confronted with the latest round of austerity in 2011 the financial leaders wanted to impose on his tiny country, he decided to hold a referendum with the Greek people.
   There was an immediate revolt within his country, in the rest of the Europe, and in the financial markets. The people of Greece couldn't be trusted to do the "right thing".

  The referendum idea was scrapped three days later. Less than a week after that he was pushed out of office for making the foolish choice of actually using democracy to make a decision.
   An unelected technocrat from Goldman Sachs was put in his place. Someone the bankers could trust.

The bankers had spoken.
   They weren't going to let democracy get in the way of their profits again.
The last time they made that mistake, Iceland voters rejected a generation-long future of debt peonage to foreign banks.

   The bankers then put another Goldman Sachs man in power in Italy. However, with the debt crisis spreading, installing unelected technocrats in every country to push through "reforms" that weren't in the public's interest was inefficient and a little too obvious.
   For starters, the bankers need to keep up the appearances of democracy, and that is hard to do while you are overthrowing democratic governments.

The Dangers of a Contrary Example

You might wonder how Prime Minister Viktor Orban keeps getting re-elected in Hungary.
After all the news media tells you all of the time how awful he is. That he's a fascist. So the people of Hungary must be terrible too.
Well, Orban may indeed be a fascist, but there's a reason why Orban is popular that has nothing to do with hating immigrants. In 2010 he flat out refused demands by the IMF to impose more austerity.

Hungarian Prime Minister Viktor Orban is sticking to his government's position that the country will not impose further austerity measures and has said that there is "no point" in continuing talks with the International Monetary Fund.

Not only that, he actually had the nerve to stand up to the banks and help out the working class.

The currency’s 40 percent slump against the franc has raised repayment costs, pushing mortgage arrears to a two-decade high and prompting Prime Minister Viktor Orban’s government to brand the loans “debt slavery.”
To help homeowners, Orban imposed currency losses on banks including Erste Group Bank AG and Raiffeisen Bank International AG (RBI) that may total 900 million euros ($1.2 billion), according to Cristina Marzea, an analyst at Barclays Capital. Faced with the risk Orban would impose further measures, lenders have offered to accept $2.2 billion of additional losses if the government promised to take no further action. If it doesn’t, banks are threatening they may withdraw from the country...
Almost 18 months after Orban was elected in April 2010, he passed a law allowing Hungarians to repay mortgages denominated in foreign currencies at discount of about 25 percent to today’s exchange rate. As long as a client applies before Dec. 31 and repays the entire loan before Feb. 28, the banks have to make up the difference.
“I paid it back last week,” Bod said. “I’m free of debt slavery,” said the former industry minister. The plan “is easy to explain from a political viewpoint. It’s cheap for the government, expensive for the banks, good for voters.”

Make no mistake - this is a large step beyond what Iceland has done. This is a government that is helping the working class at the expense of the bankers.
This is a threat to the status quo and to bank profits. The EU and IMF broke off talks with Hungary in response to this defiance.
That's scary, right? Orban wasn't done. The following year he threw Monsanto out of the country. Unlike several EU members, GMO seeds are banned in Hungary.

Then Orban got really radical.

(Reuters) - Hungary can fund itself without help from the International Monetary Fund although an IMF deal would reduce Budapest’s borrowing costs and provide a backstop in nervous markets, Prime Minister Viktor Orban told a newspaper.

In July 2013, Orban asked the IMF to leave Hungary.

To add all of this up, Orban essentially did everything that a leftist would want from a politician, and got away with it. If a left-wing politician did something like this, leftists would absolutely swoon over him worldwide.
Instead it's a gawddam proto-fascist.