* Pandemic-related hit to public finances smaller than expected * Berlin eyes record public investment of 62 bln eur in 2021 (Adds Scholz, budget details) BERLIN, Jan 19 (Reuters) - The German government has finalised its 2020 budget with net new debt of 130.5 billion euros ($158.3 billion), the highest level of annual borrowing in post-war history due to the COVID-19 pandemic but still 40% less than originally planned. Finance Minister Olaf Scholz is planning for record new debt of up to 180 billion euros this year to continue rescue and stimulus measures to shield Europe’s largest economy from the impact of a potentially aggressive new wave of infections. “Despite the pandemic, we have public finances under control,” Scholz said. “We have the strength to keep on countering the coronavirus impact with massive action - and that’s exactly what we are doing.” The federal government recorded a structural budget deficit of 1.52% of economic output in 2020, the finance ministry said. That was above the deficit limit of 0.35%, but parliament has suspended the fiscal rule for 2020 and 2021 due to the pandemic. The 2020 debt level easily surpassed the previous record of 44 billion euros in 2010 following the financial crisis. Still, it was much lower than the government’s initial estimate for borrowing of up to 218 billion euros. Berlin needed less debt last year because earmarked money for public investment did not flow into projects as quickly as expected, coronavirus aid was not tapped by as many firms as anticipated and the pandemic-related hit to tax revenues was smaller than projected, according to the finance ministry. The government expects public investment to rise to a record 62 billion euros this year after already reaching an unprecedented high of 50 billion euros in 2020. Scholz said the government’s strong response to the crisis had paid off as the measures helped the economy to shrink by a smaller-than-expected 5% last year and helped to reduce the pandemic-related hit to the labour market, the social security system and overall public finances. Germany’s internationally praised and widely copied job protection scheme, also known as Kurzarbeit, cost the government 22 billion euros last year. But it helped to stabilize employment and with it overall tax revenues, which plunged by a smaller-than-expected 14% to 283 billion euros on the year. “This has paid off well,” a senior government official said.