Ireland face Sweden at the Friends Arena in Stockholm on Friday evening before playing Austria at the Aviva Stadium next Tuesday.
The three sides are effectively battling it out for second place in Group C, with Germany all-but guaranteed top spot in the group.
Sweden lead the way with seven points, one more than Giovanni Trapattoni's men, with Austria a further two points back.
But Stoke forward Walters knows they could be out of the running come Tuesday night if they slip up in the two crucial qualifiers.
"If we go there and we are beaten by Sweden and we don't turn up against Austria and are beaten there, we are not going to get second place, are we?" he said.
"We need to go and get the points, so it will be a pivotal week for us. We will know more come Tuesday night.
"We have got to go and get the results we need and if we don't, we all know the consequences of that."
Germany thrashed Ireland 6-1 in Dublin when the sides met in October and Walters admits their dominance in the group has led to a three-way fight for a play-off berth.
"Germany are way above most teams in the world and I think the group is theirs, so a lot of teams are fighting now for second place," he added.
"You have got to pick your points up where you can. It's going to be a difficult test for us, but they are two major games we are going into and we need to get the points out of them."
Walters feared he may miss the two games after he inflamed an existing ankle injury after a training ground collision with West Brom striker Shane Long.
The problem proved not to be too serious, although Walters looks likely to start on the bench with Long favourite to partner skipper Robbie Keane in attack.
"I have had bad ankle injuries in the past and ruptured it, and that pain was up there above them, so I thought it was going to be worse that it was," he said. "But it was fine after about an hour."