Put in a large bowl the water, yeast and mix to dissolve. Add the sugar, flour, salt and mix to combine into a runny batter. Cover the bowl with a kitchen towel and let it rise for about 1 hour or until bubbles have formed on the surface.
In the meantime we prepare the syrup: put in a medium saucepan the sugar and water and simmer for 5-6 minutes, until the sugar melts and syrup forms. Remove the saucepan from the heat, add the honey and stir to combine.
In a large, deep frying pan heat plenty of olive oil. When hot, wet your hands with water and take some of the batter in your palm.
Lightly squeeze the batter in your palm and while batter is protruding, you will see it form a small ball. Scoop it with a tablespoon and drop it into the hot olive oil. Fry, until golden brown. Each time you form a "loukoumades" dip the tablespoon in a glass filled with olive oil, so batter will not stick to it.
Remove them with slotted spoon and drain on paper towel. Repeat with the remaining batter.
Serve the "loukoumades", drizzled with syrup.