In a large bowl, lightly combine ground beef with 1/3 cup parsley, onion, 2 1/2 teaspoons salt, 1/2 teaspoon pepper, nutmeg, and 1/4 cup of the flour. Add milk and egg; stir just until ingredients are blended.
Shape meat mixture into 24 meatballs, about 2 inches in diameter; roll meatballs in remaining 1/2 cup flour. Heat butter in a large heavy skillet; brown meatballs on all sides and cook for about 20 minutes, or until done. Remove to a warm platter and keep warm while making sauce.
Drain off all but 2 tablespoons of drippings from the skillet. Add flour, bouillon cube or granules, 1/2 teaspoon salt, and 1/8 teaspoon pepper. Gradually add 2 cups water, stirring until smooth. Bring sauce to boiling point, stirring constantly. Spoon some of the sauce over the meatballs then sprinkle with parsley if desired. Serve remaining sauce at the table.
Calories per serving: 318