Russian assets seized in Ukraine may be used for reconstruction - minister

U.S. Treasury Secretary Yellen holds a bilateral meeting with Ukraine's Finance Minister Marchenko, in Washington

KYIV (Reuters) - Assets belonging to Russian and Belarusian individuals seized by Ukraine could be used for the country's massive post-war reconstruction effort, Finance Minister Serhiy Marchenko was quoted on Friday as saying.

The government has frozen Russian and Belarusian assets in Ukraine worth some 44 billion hryvnias ($1.21 billion) since the start of Moscow's invasion on Feb. 24, according to the Economic Security Bureau, a state agency.

"We are currently looking for the resources necessary for (our) critical recovery," Marchenko told Ukraine's Suspilne public broadcaster, mooting the creation of a special liquidation fund as one budgetary source for the reconstruction.

"Money seized on the territory of Ukraine from Russian and Belarusian citizens can be involved in this fund," he added, without elaborating.

Ukrainian officials say the government will need to spend around $38 billion on reconstruction in 2023 alone. Total rebuilding costs have been estimated at $750 billion.

The European Union is also looking at using Russian assets frozen under Western sanctions against Moscow in the postwar reconstruction of Ukraine, the head of the European Council, Charles Michel, said at an EU summit last week.

Estonian Prime Minister Kaja Kallas said that amounted to some 300 billion euros, though Berlin and others have warned that actually seizing the assets might be illegal.

Moscow said on Thursday it would retaliate if the EU moved to confiscate assets belonging to the Russian state or its citizens. Foreign ministry spokeswoman Maria Zakharova said any such move would be "stealing".

($1 = 36.5000 hryvnias)

(Reporting by Max Hunder; Editing by Gareth Jones and Tomasz Janowski)