The poll was initiated when Iceland’s president refused to endorse the "Icesave" package, named after the bank which had offered high-yielding accounts to British and Dutch customers who were subsequently reimbursed by their own governments. Icelandic foot-dragging on paying that money back has caused a vital $4.6 billion International Monetary Fund-led loan to be frozen.
Ahead of the vote, a battle for the nation’s hearts and minds has been underway with Iceland’s prime minister, Johanna Sigurdardottir, warning Iceland would effectively be opting out of the international financial system if it were to say no to the deal.
In addition, a "no" vote to the Icesave deal would also spell the end of Iceland’s hopes of joining the eurozone – a crucial difference between its predicament and that of Greece, with investors expecting a bailout for Greece from wealthier eurozone partners like France and Germany. Sigurdardottir’s opponents claim Iceland has every right to reject the deal, accusing Britain and the Netherlands of bullying the smaller country into unfair terms.