LONDON: Greece looks all set to leave the European Union, as its parliament backed Prime Minister Alexis Tsipras' call for a referendum on the country's bailout deal with international creditors. The call for the referendum -- scheduled for July 5 -- has angered Greece’s creditors, who earlier rejected the debt ridden country’s request for a bailout extension.

This means that Greece is almost certainly going to default on its $1.8bn payment to the International Monetary Fund -- which it needs to make by Tuesday. In a speech, Tsipras said that he was confident that "the Greek people will say an emphatic no to the ultimatum" by the country's creditors, namely the IMF, European Central Bank and European Commission.

Greece maintains that EU elite is holding the country to ransom, with Tsipras saying, “The day of truth is coming for the creditors, the time when they will see that Greece will not surrender, that Greece is not a game that has ended… I am certain that the Greek people will rise to the historical circumstances and issue a resounding 'No' to the ultimatum.”

With this, Greece’s exit from the EU seems almost inevitable, as Tsipras expressed confidence that "in the aftermath of this proud no, the negotiating power of the country [with the country's creditors] will be strengthened.” "The creditors have not sought our approval but have asked for us to abandon our dignity. We must refuse," he said.

Following the news, the head of Piraeus Bank said that the country’s banks will remain closed on Monday. The BBC reported that Greeks have been queuing to withdraw money from cash machines over the weekend, and Greece is now expected to impose capital controls as it tries to avert a financial collapse.

The current situation comes after five months of negotiation, with Greece attempting to secure funds to cover its payment to the IMF due at the end of the month.

The negotiation process has been an unwieldy drama, with creditors most recently expressing hope as Greece unveiled a series of new proposals. The proposals were:

1. New taxes on businesses and the wealthy

2. Selective increases in VAT

3. Savings in pensions linked to curbing early retirement and increasing pension contributions

4. No further reductions in pensions or public-sector wages - "red lines" for Greece's Syriza government

Following the proposals, the European Central Bank (ECB) approved additional emergency funding for Greek banks to cover withdrawals -- thereby allowing banks to stay open and providing some additional time for a deal to be reached.

The move provided false reassurance, as negotiations seem back on the verge of collapse. In a better indication of the scenario, just over a week ago, Greece’s Prime Minister Alexis Tsipras accused the country’s creditors of criminality. Tsipras said that the EU and IMF wanted to cut pensions and tax rises to "humiliate not only the Greek government... but humiliate an entire people". The IMF bore "criminal responsibility" for austerity measures that had plunged the Greek economy into recession, the Greek Prime Minister said.

Meanwhile, Jean-Claude Juncker, the European Commission President accused Tsipras and the Greek government of misleading the country. "I am blaming the Greeks [for telling] things to the Greek public which are not consistent with what I've told the Greek prime minister," Juncker said, adding that Tsipras had wrongly told the Greek people that the Commission and IMF were asking for a raise in VAT on electricity. "I'm not in favour, and the prime minister knows that, ... of increasing VAT on medicaments and electricity. This would be a major mistake." "The debate in Greece and outside Greece would be easier if the Greek government would tell exactly what the Commission... are really proposing," he added.

Greek finance Minister Yanis Varoufakis claimed that EU proposals did include VAT increases: "Juncker either hadn't read the document he gave Tsipras - or he read it and forgot about it” (as quoted in the BBC).

Signs of trouble first emerged a few weeks ago as a round of talks between Greek officials and lenders collapsed in 45 minutes. Greece’s current bailout agreement with creditors -- the IMF, European Central Bank (ECB) and European Commission -- runs out at the end of June, with haggling continuing on the release of the last €7.2bn in funds.

The EU wants Greece to make spending cuts worth €2bn to secure the deal. This includes a proposal to cut pensions -- something that Greece, which has had to budge on a range of issues, has refused to do.

Greek deputy Prime Minister Yannis Dragasakis said that Athens was still ready to negotiate with its lenders (as quoted in the BBC). Dragasakis added that the proposals submitted to the EU on Sunday fully covered the fiscal deficit as demanded.

The situation now seems to have reached a point of no return, with Austria's finance minister saying on Sunday that Greece's exit from the eurozone "appears almost inevitable", after EU leaders refused to extend the bailout deadline after the call for a referendum.

"Greece is solely responsible for a failure of the negotiations," said Hans Jorg Schelling in an interview with Austrian newspaper Die Presse.

However, the so-called Grexit will need the approval of the remaining member states. "Greece would have to file a request to do so. The other EU countries would have to approve the request. Only then could Greece leave the eurozone," Schelling said. "The consequences for the euro countries are not nearly as bad as for Greece," Schelling added. "It's clear that one country can under no circumstances blackmail the European Commission and the euro countries."

Further, there is still lack of clarity on how all of this will play out. For one, Greece is expected to retain the Euro, with European Council President Donald Tusk tweeting the following: “"Greece is and should remain euro area member.” "In contact with leaders to ensure integrity of euro area of 19 countries," he added after the other 18 finance ministers met without their Greek counterpart in Brussels.