Likely you have a bad ABS module. To be absolutely sure you will have to have a scan tool (Dealership or independent with VAG-COM software) check for communication between the module and the dash unit (diagnostic BUS controller) The flashing light would indicate that the dash is not receiving a signal from the ABS module.
THis would require replacement of the module- which is attached tightly to the ABS pump. On a New Beetle it's a tight fit (as is everything in that engine bay!) and would likely require the pump to be dismounted from it's bracket and the module removed and replaced and coded.