In a large bowl, combine ground beef, breadcrumbs, milk, beaten egg, minced garlic, salt, and pepper. Mix gently until just combined. Do not overmix.

Roll the mixture into 1-inch meatballs.

In a large skillet, brown the meatballs over medium-high heat. Remove meatballs from skillet and set aside.

In the same skillet, add olive oil and chopped onion. Cook until softened, about 5 minutes.

Add minced garlic and cook for 1 minute more until fragrant.

Pour in the Merlot wine and scrape up any browned bits from the bottom of the skillet. Let it simmer for 2 minutes.

Stir in the undrained diced tomatoes, beef broth, Worcestershire sauce, and sugar.

Bring the sauce to a simmer. In a small bowl, whisk together cornstarch and water. Stir this mixture into the simmering sauce until thickened.

Return the browned meatballs to the skillet with the sauce. Cover and simmer for at least 20-30 minutes, or until meatballs are cooked through and heated.