Greece won a reprieve from a European Union order to recoup about 425 million euros ($552 million) from the country’s insurance association for farmers as a result of its “exceptional” economic situation.

Greece appealed a December 2011 decision by EU regulators ordering it to claw back the illegal state aid from the Greek Agricultural Insurance Organisation, ELGA, within four months of notification. In an interim decision published on the EU court’s website last night, Greece won a suspension of the order to recoup the money.

“In the exceptional circumstances of the current economic and social situation in Greece” and “to maintain social peace and to prevent social disorder,” the EU’s 2011 order will be suspended, the president of the Luxembourg-based EU General Court said in the decision, dated Sept. 19.

Greek Prime Minister Antonis Samaras has struggled to reach agreement with his coalition partners on an 11.5 billion-euro budget-cut package that’s key to receiving international aid funds. Finance Minister Yannis Stournaras and the “troika” of inspectors from the European Commission, the European Central Bank and the International Monetary Fund have been locked in talks for two weeks on carving out savings.

The court president found that “in the current situation filled with intense emotions” it is possible that recovery of the payments “could be used publicly, by some sectors, as an example of the injustice practised against the agricultural class” and that may trigger “violent demonstration.”

The suspension of the state-aid repayment will be in place until there’s a final decision by the court on Greece’s main appeal seeking to overturn the EU order. The court said that if circumstances change in Greece the commission can ask the court to reassess the situation and lift the suspension.

Decisions by the EU General Court, the 27-nation bloc’s second-highest tribunal, can take 2 to 3 years from the date a case is filed. Greece filed its appeal against the 2011 EU decision in February this year.

The case is: T52/12 R, Greece v. European Commission.

[Bloomberg]