Mix meat, bread, egg, salt and pepper together. Form into small balls. Saute in olive oil until well browned. Add potatoes and saute for 10 minutes. In another pan, saute onions in oil for 10 minutes. Add carrots, celeriac and flour. Saute 10 minutes. Add hot water, salt, pepper, bay leaf and jalapenos. Simmer for 15 minutes. Pour sauce over meat and potatoes, simmer for 15 minutes and serve.