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What is he talking about? He says that the Youth Brigade needed to be sacrificed to achieve the Prince's ambition.

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In case you are a bit lost, here is a bullet point to help you:

*Riou and Jowy are from Highland
*They were in the Youth Brigade of Highland
*There was a peace treaty between Highland and the City-State Jowston
*Prince Luca of Highland ordered for the Youth Brigade to be murdered
*They (Highland) then pinned the blame on the City-State, saying that the City-State used the peace treaty as a cover for an ambush
*Jowy and Riou got away, so they said that they were both spies for the City-State

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And Nanami demonstrates the attitude they were going for. She admits that if she didn't know better, she would hate the City-State.

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Take notes everybody.

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We are marched down the streets in shame. A woman in a carriage, identified as Princess Jillia, watches this all happen. She asks what's going on and is told that Riou and Jowy are about to be executed as spies. She expresses disbelief, saying we are just kids, we can't be spies.

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I am told to shut up by the guard driving the carriage, and he is hushed by the Princess.

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He is also silenced, but Jillis speaks up once again.

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Our execution starts with us being beaten. Rowd accuses us of crimes we didn't commit and asks

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Took the words right out of my mouth, Riou.