Preheat the oven to 350°.
In a large enameled cast-iron casserole or a large skillet, melt the butter in 1 tablespoon of the olive oil. One the oil is hot, Arrange the meat in a single layer, (don't crowd) and season with salt and pepper. Cook over moderately high heat, turning occasionally, until well browned, about 4 minutes per side.
Add the chopped onion and garlic and cook over moderate heat, stirring occasionally, until the onion is softened, 5 minutes.
Add the flour and stir to coat the meat with it. If using a skillet, transfer the meat to a 6 - 7 quart Dutch oven.
Then deglaze the skillet with about a cup of the wine. bring to a boil, stirring to dissolve any brown bits stuck to the bottom of the pot. Add that to the Dutch oven with the beef.
Add the remaining wine, bay leaves and thyme.
Cover the casserole and transfer it to the oven. Cook the stew for 1 ½ hours - 2 hours, until the meat is very tender and the sauce is flavorful.
Meanwhile in the frypan, sautee the chopped pancetta until browned.
Combine the pancetta, pearl onions, mushrooms and carrots. Add the remaining 1 tablespoon of olive oil, ¼ cup of water and a large pinch each of sugar, salt and pepper.
Bring to a boil, then cover and simmer until almost all of the water has evaporated, about 15 minutes. Uncover and cook over high heat, tossing, until the vegetables are tender and nicely browned, about 4 minutes.
To serve, stir some of the vegetables and lardons into the stew and scatter the rest on top as a garnish. Top with a little chopped parsley and serve.