In the past years there have been many attempts to produce and improve global soil-moisture datasets and drought indices. However, comparing and validating these various datasets is not straightforward. Here, interannual variations in drought indices are compared to interannual changes in vegetation, as captured by NDVI. By comparing the correlations of the different indices with NDVI we evaluated which drought index describes most realistically the actual changes in vegetation. Strong correlation between NDVI and the drought indices were found in areas that are classified as warm temperate climate with hot or warm dry summers. In these areas we ranked the PDSI, PSDI-SC, SPI3, and NSM indices, based on the interannual correlation with NDVI, and found that NSM outperformed the rest. Using this best performing index, and the ICA (Independent Component Analysis) technique, we analyzed the response of vegetation to temperature and soil-moisture stresses over Europe.