How wide are the wheels?
Reducing the tire size like you suggest won't hurt handling much. You will still have a lot more rubber on the ground than most other Beetles. You will have so much tread contact area that it will take a lot to lose traction.
Many don't know that when you reduce the aspect ratio only, the actual tread contact width increases. A 205/40 will have a wider tread contact than a 205/60. On the other hand, a 205/40 will have a shorter tread contact pattern than a 205/60.
Over the years I've had 7 and 8" wide wheels on my car. I've run 205/50, and 205/55 on the front, and 225/50, and 215/60 on the rear. In my experience, the rubber compound was the biggest factor determining grip, not the size.
What brakes?