The correct answer is option A. "the Soviet Union built them too". The nuclear arms race took place during Cold War, and was a competition for supremacy in nuclear warfare between the United States and the Soviet Union. Under this competition if the United States built hydrogen bombs, the Soviet Union would built them too in order to stay in line with his competitor.
He meant that there was a limit of land Spain had the ability it could control, rather than the amount it could actually be successful controlling, instead of it falling apart.