Nearly all of the Icelanders who turned out to vote on 6th March in the referendum on the law on the Icesave agreement rejected the text: 93% voted "no" with only 2% voting in favour.

Turn out rose to 54.50% in this consultation which is the first to be organized in the country since 1944 (the year of the referendum on the proclamation of Iceland's independence).

Prime Minister Johanna Sigurdardottir (Social Democratic Alliance Party), and Finance Minister Steingrimur Sigfusson, announced that they would not vote. The low turnout may also be explained by the fact that this referendum seemed to be devoid of meaning - without purpose even - since it involved a text that was almost obsolete, since the two parties, Iceland on the one hand and the Netherlands/UK on the other – were negotiating a new agreement. "We have made some progress, we are nearing an agreement. I think a significantly better agreement for Iceland is to hand," said Finance Minister Steingrimur Sigfusson on 4th March. The next day he published a press release in which he stated that negotiations were continuing and said he was confident that the parties would come rapidly to a new agreement. This was taken up by the Foreign Minister Össur Skarphendinsson.

President of the Republic Olafur Ragnar Grimsson who originally caused the election to take place because he refused to sign the law on the Icesave agreement on 5th January defended the usefulness of the referendum. "The decision to convene a referendum has already led to the British and the Dutch believing they should make a better offer," he said.

The refusal of President Grimsson led the government to submit the text to referendum as demanded by the Icelandic Constitution. On 6th March the Icelanders therefore followed their Head of State by voting en masse against the agreement approved by the MPs at the end of December 2009.

The referendum provided an opportunity for several demonstrations. Several hundred people rallied before Parliament in Reyjkavik in protest against the law on the Icesave agreement; some carried saucepans recalling the movement of Autumn 2008 which led to the fall of the government led by Geir H Haarde (Independence Party). "No Icesave. No traitors in power", "The country is innocent" and "Save our houses" these were the slogans that could be heard.. "This agreement is unacceptable for any sovereign nation," declared Magnus Arni Skulason, a founder member of Indefence, the group that was at the origin of several petitions against the Icesave agreement. "This is an agreement achieved by force under threats from the UK and the Netherlands which have used their influence against Iceland at the IMF and within the EU" he added. "The result can be interpreted as challenge or as a previously written conclusion," analysed Foreign Minister Össur Skarphendinsson when the results were announced.

The IMF refrained from making any comment. Economy Minister Gylfi Magnusson warned that a "no" to the referendum could lead to possible delays in the grant of a loan to Iceland by the IMF (the latter granted 2.1 billion dollars to Reykjavik in November 2008; one billion still has to be paid).

Prime Minister Johanna Sigurdardottir, ruled out resignation after the election. "This referendum has no impact on government life," she declared. "We must continue and finish the debate on Icesave. We must come to an agreement," she concluded. The government, which is being accused of devoting too much time to the Icesave affair, must now find a new agreement with the UK and the Netherlands otherwise it might find itself truly weakened and see its candidature to the EU seriously impeded. The European Commission took note of the massive Icelandic "no" on 7th March but stressed that the country's accession to the EU was part of a separate procedure. However the Icelanders will finally have to pay the Icesave debt in one way or another.