City seemed on course for European qualification after a flying start under Eriksson, and the Blues have remained in the top six for most of the season.
But Saturday's 2-0 defeat at Reading left City with just 2 wins in 12 league games, a run which has seen us slide to 8th and fail to score in our last 3 games.
With both Chelsea and United getting knocked out on Saturday, Portsmouth are the only European contender that can use up the European place on offer through the FA Cup.
Unless Portsmouth get to the final and finish in the top 5, then only a top-5 finish will be good enough for City to secure a European place.
But although it looks likely we'll have to rely on the Intertoto Cup to earn a place in Europe next season, Eriksson has demanded City keep fighting.
"It is a difficult and frustrating time because we have taken only 1 point and conceded easy goals, which in the 1st half of the season Manchester City would never have done," he said.
"It is up to us to make it right and start to win games again, because otherwise there is no meaning talking about Europe.
"That's the most important thing now and we have to start to win them quickly because there's only 9 games to play.
"But as long as it is still a mathematical possibility, we have to believe it and fight for it."
Although Vedran Corluka missed a great chance to put City in front in the first half at Reading, we lost Richard Dunne to a gashed shin shortly after.
With Micah Richards and Nedum Onuoha already out, regular full-backs Corluka and Michael Ball had to cover in the middle and ultimately the City defence capitulated as Shane Long and Dave Kitson scored in the second half.
Eriksson also felt City should have been given a penalty just before the break instead of Michael Johnson being booked for diving. The fact the City midfielder went down theatrically moments earlier didn't help his cause.
"I don't think we deserved to lose today and maybe we should have got a penalty. I think it was wrong by the referee, it's as simple as that," said Sven.
Dunney had nine stitches in his shin and Sven is hoping he'll be fit for next week's home game against Spurs. The City boss said there could be changes after his decision to continue with Benjani as a lone striker back-fired at Reading.
"When you play 3 games, get 1 point and don't score a goal, you have to look at everything and see how we're going to play next week," he added.