Prep the Bread: Soak bread in milk until soft, then squeeze dry and break into small pieces.
Make the Meatballs: In a large bowl, combine softened bread, ground beef and pork, onion, ouzo, mint, oregano, olive oil, eggs, salt, and pepper. Mix until smooth and homogeneous.
Shape into walnut-sized meatballs. Lightly dust in flour.
Heat vegetable oil to medium-high in a large skillet. Fry meatballs in batches until golden, about 6–8 minutes. Drain on paper towels.
Make the Sauce: In a wide pot, heat olive oil and sauté onion, carrot, and garlic until soft. Stir in diced tomatoes, ouzo, star anise, water, orange zest, oregano, salt, and pepper. Simmer 20 minutes.
Add fried meatballs to the sauce and cook, covered, over low heat for another 20 minutes, letting flavors meld.
Serve hot with crusty bread, rice, or fried potatoes.