Add onions, garlic and balsamic vinegar; cook, stirring with a wooden spoon to scrape brown bits from bottom of pan, about 5 minutes. Add tomato paste and cook a few minutes more. Add beef with juices back to pan and sprinkle with flour; stir with wooden spoon until flour is dissolved, 1-2 minutes. Add wine, beef broth, water, bay leaf, thyme, and sugar; stir with wooden spoon to loosen any brown bits from bottom of pan and bring to a boil. Cover pot with lid, transfer to preheated oven and braise for 2 hours.