Q&A

Thanks Zee. Sorry for the confusion. It seems that the altenator pulley is spinning when I try to crank. The engine makes a whining noise but when you check the timing belt it is not spinning and it's not cranking. Pardon my ignorance and please correct me if im wrong. My guess is that if the starter was not spinning the alternator would not spin. I am very much thankful for your insight. Is there a posibility that it may also be a loose ground wire.

OK:)
Let's clear something:
cranking = the starter spins the engine, the crank shaft is turning, also called "spinning" In this condition the accessories (A/C compressor, alternator, steering pump..) attached by a belt to the crank pulley are also spinning.
starting = the cranking engine is received all the necessary inputs, like fuel, ignition, start authorization and start to run on a specific RPM.
I guess your car cranks (spins) but would not start.

Unfortunately I think in your case there is a problem with the timing belt. I'd remove the front cover and inspect all the timing components. On the 1.8T engines I have seen failed cam chains (connects the 2 cams in the back) which breaks and james -due to a bad tensioner - and lock the cams while the crank shaft still spins, causing a serious damage to the valve train.
Anyway, the loss of the cam timing - being an interference engine - will cause a serious engine damage which requires a major tear down and parts replacement. I'd suggest to find a reputable VW specialist in your area who had done this type of repair and familiar with it.
Could you tell us how many miles are in the car? Was the timing belt ever replaced? Was the car maintained well, all oil changes with the approved synthetic oils, etc..?

Zee