Bouquet Garni: In a spice bag (you can buy these bags from stores), put all the herbs below and tiewell: 1 teaspoon thyme or 3 sprigs thyme (cut to fit the small bouquet garni bags), 6 to 8 cloves, 1 big bayleaf (break into 4 pieces), 3 cloves garlic - smashed,8 sprigs flat parsley (cut into 1"). If you do not have a spice bag, you can make one by cutting 4" square from cheesecloth. Wrap all small herbs in. Tie into a bundle with a kitchen twine.
Step 1: Brown bacon with 1 tablespoon olive oil in a skillet on medium heat for 5 minutes, and then transfer to a casserole, leaving the oil in the pan. In the same pan, add 2 tablespoons olive oil and brown cubed beef on all sides, and then transfer to the casserole. Sprinkle salt and pepper. Add 1 tablespoon olive oil in the pan, and brown sliced onions until transparent. Then, add tomatoes and carrots, and brown for 3 minutes and transfer to casserole. Deglaze frying pan with red wine and transfer to the casserole. Add 2 cups beef stock, 1 spice bag of garni bouquet, and brown sugar. Bring to a boil and simmer on low heat for 1 hour.
Step 2: While the beef stew is simmering, work on the mushrooms and pearl onions for garnishing: Braised mushrooms in 2 tablespoons butter and 1 tablespoon olive oil in frying pan under medium-low heat for 8 minutes and set aside. Braised pearl onions in 2 tablespoons butter and 1 tablespoon olive oil in frying pan under medium-low heat for 8 minutes until it becomes transparent and set aside. Melt 2 tablespoons of butter in low heat and add 3 tablespoons of all-purpose flour. Mix well and blend to a paste.