The shocking attack took place outside St Kilian’s church in Heilbronn last Saturday leaving an Afghan teenager, 17, an Iraqi, 25, and a Syrian man, 19, seriously injured.
The German-Russian attacker, reported to be drunk, was detained by passersby until the police arrived.
Police confirmed the suspect told authorities he was angry at Germany’s asylum policy, which has seen the arrival of more than one million migrants to the country.
He was first charged with assault and released but prosecutors then raised the charge to “politically motivated” attempted murder and issued a formal arrest warrant.
The newspaper Heilbronner Stimme expressed concern about the police decision to release the attacker.
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Their report said: “You can only shake you head at the fact that the police released a man who would have kept on attacking had it not been for the courage of people nearby.
“It is highly likely this was a racist attack and it could have easily led to death.”
Bettina Joerg, spokeswoman for Heilbronn prosecutors, said that the suspect was drunk and wanted to send a signal “about the current refugee policy.”
Heilbronn’s mayor, Harry Mergel, said: “I am deeply troubled by this revolting crime and my thoughts are with the victims.
“I hope they won’t suffer lasting consequences.
“I call on people to treat refugees with humanity and be prepared to help them.”
In January, the city of Cottbus turned migrants away amid fears over rising violence between migrants and right-wing extremists.