They didn't default on their debt, precisely because they got their house back in order. But this came at great price, with major suffering by the populace during a 4-year economic crisis. [1] Despite all the suffering and poverty caused, the government took the opportunity to reform healthcare, which was a disaster [2] and bring costs under control.

Sweden has had a brighter future since.

[1] https://en.wikipedia.org/wiki/Sweden_financial_crisis_1990-1...

[2] p44 https://www.fraserinstitute.org/sites/default/files/SwedishH...